DYCHE | Local Option Sales Tax is Conservative Sense
By John David Dyche
"Let the people vote on investing in their community. An additional one penny sales tax pays for specific community projects, voted on by the people. Then the tax goes away."
So says the group Local Investments for Transformation, or LIFT, about a local option sales tax in Kentucky. Two bills in the Kentucky General Assembly would put a constitutional amendment on the ballot that would allow such a tax. The bills, HB 399 and SB 135, have impressive bipartisan backing.
The House bill has fourteen Democratic sponsors and three Republican sponsors, including Jeff Hoover of Jamestown and John Carney of Campbellsville, both members of GOP leadership. Republican Paul Hornback of Shelbyville introduced the Senate bill, of which five Democrats are co-sponsors.
This bipartisan sponsorship reflects the broad support for the local option sales tax throughout the state. In addition to Governor Beshear, mayors, county judges, chambers of commerce, labor unions, industry groups, professional associations, and media of all sizes and sorts support this economic development tool that is already working well in localities across the country.
It is important for people to understand that neither putting the constitutional amendment on the ballot nor passing it would raise the sales tax anywhere. The one percent increase requires a vote of the people before it goes into effect in a community.
LIFT emphasizes that "the new revenue would be dedicated to funding a specific set of projects chosen by a community-wide, citizen-driven process. It would not go into a city's or county's general fund. "Moreover, if the citizens vote for the tax, "it ends when the projects are paid off and any future local option sales taxes would not overlap and would require a new referendum vote."
Polling suggests overwhelming public support for the amendment, but its prospects are uncertain in this year's General Assembly. Hornback told WDRB that he doubted his bill would pass this year, but that has not stopped Louisville mayor Greg Fischer, one of the idea's most energetic backers, from pushing hard for it.
"The trend is definitely positive," Fischer says. "This is about direct American democracy, giving people the right to vote that citizens in 37 other states already have."
Veteran political pundit Al Cross concurs. "Putting the local-tax amendment on the November 2014 statewide ballot is a no-brainer. If local people want to levy local taxes on themselves, they should be able to."
Indeed, the local option sales tax embodies common-sense, good government principles that most conservatives and Republicans profess to support. It puts power at the local level closest to the people; is taxation with direct representation since the citizens have the right to vote on it; has high accountability by being tied to specific purposes; taxes consumption instead of savings or work; and sunsets instead of continuing indefinitely.
And just because a tax is proposed does not mean it will pass. In 2007, when Lieutenant Governor Jerry Abramson was Louisville mayor, he went back on his word and pushed for a new library tax. After a vigorous public debate the voters soundly rejected it by a 2-1 margin. Advocates for any new sales tax levy will have to make a compelling case.
Some Louisville Republicans oppose the local option sales tax on the grounds that Louisville is already too highly taxed. They may be right about that, but they should offer a detailed and specific tax reform proposal instead of reflexively opposing the local option sales tax. Also, if the people approve an additional penny in current tax climate they must really want the projects in question.
Upon introducing the House bill, its primary sponsor, House Majority Whip Tommy Thompson of Owensboro, said, "Local control and local decisions are the most fundamental aspects of government. That's why I believe it's time for the state to empower local governments to invest in their future. HB 399 will be the vehicle for people to have a voice in the shape and direction of their community."
But putting a constitutional amendment on the ballot requires a supermajority of 60 votes in the state House and 23 votes in the state Senate. The first step is getting the bills out of committee and onto the floor to be voted on.
Citizens should urge their representatives in Frankfort to support the local option sales tax bills, HB 399 and SB 135. There is no good reason why state government should forbid the people from having this tool to use in improving their local communities as they see fit.
John David Dyche is a Louisville attorney and a political commentator for WDRB.com. His e-mail is email@example.com. Follow him on Twitter @jddyche.