Fischer aide: Cities and counties would have to negotiate - WDRB 41 Louisville News

Fischer aide: Cities and counties would have to negotiate new local sales tax

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Eileen Pickett, interim CEO of Greater Louisville Inc., explained the sales tax proposal Thursday Eileen Pickett, interim CEO of Greater Louisville Inc., explained the sales tax proposal Thursday

FRANKFORT, Ky. (WDRB) -- If a local-option sales tax were allowed in Kentucky, cities and counties in the same area would have to first negotiate on how to share the new taxing power, and if they can't agree, the power would be split equally, Louisville Mayor Greg Fischer's chief legislative aide told a House panel on Thursday.

Fischer and Lexington Mayor Jim Gray are among the leading advocates of a constitutional amendment that would allow cities and counties to levy their own 1 percentage point sales taxes to pay for local projects.

One sticking point is how local governments in the same county will share the new taxing power, since no more than 1 percentage point could be added in any county under the proposed amendment.

Mary Ellen Wiederwohl, Fischer's chief of strategic initiatives, told the House economic development committee that a bill addressing the details of how the tax would be implemented would be introduced by Monday.

She said the bill, called enabling legislation, will require cities and counties to first try to work out an inter-local agreement on the sales tax. If an agreement can't be reached, a city and a county would split the taxing power so that each could enact a 0.5 percentage point levy, she said.

Rep. Julie Raque Adams, an eastern Jefferson County Republican, asked how it would work in Louisville, where 82 suburban cities like Jeffersontown and Hurstbourne have independent taxing power and could try to get their own sales taxes.

EARLIER: Small cities complicate local-option sales tax proposal

Wiederwohl said the Jefferson County League of Cities, which represents the suburban cities, has agreed to take part in a Community Investment Commission that would decide projects for all of Jefferson County.

UPDATE, 7:15 pm: The enabling legislation will stipulate that the investment commission is the only way the suburban cities can participate in the local sales tax, and if they don't go along with the commission process, they won't have independent power to levy their own sales taxes, said Chris Poynter, spokesman for Fischer.

(Wiederwohl had said in an earlier interview that the small cities would still have independent sales taxing authority even if they don't participate in the investment commission, but Poynter said Thursday night that the draft of the enabling legislation has been changed in that respect.)

Mayor Bill Dieruf of Jeffersontown, the largest suburban city in Jefferson County, supports the countywide commission process.

Before any of that becomes an issue, lawmakers must first pass a constitutional amendment to allow the taxing power, which must also be ratified by voters in a statewide referendum.

The proposal got a mostly positive reception during its first hearing of the 2014 General Assembly on Thursday, though no vote was taken.

Despite her concerns about conflicts between localities, Adams told her colleagues that she should support the local sales tax referendum since she also supports allowing Kentucky voters to decide on expanding gambling through another proposed constitutional amendment.

Rep. Tommy Thompson, the House majority whip and a local-option co-sponsor, said the sales tax would have been a faster and more democratic way for his Owensboro community to build its new convention center than doubling the city's tax on insurance policies. He called it "an innovative and practical concept."

But Rep. Kim King, a Republican from Harrodsburg, said the only people aware of the proposal in her district are opposed to it. If they travel to bigger communities to shop, they will pay more taxes but not receive the benefits, she said.

"I have not spoken yet with a single individual in my counties that agrees with this," she said.

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