Ky. House committee approves local option sales tax - WDRB 41 Louisville News

Ky. House committee approves local option sales tax bill

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FRANKFORT, Ky. (WDRB) - Mayor Greg Fischer's local-option sales tax proposal cleared a House panel by a 6-3 vote Tuesday.

House Bill 399 -- which would raise money for parochial projects through a temporary local sales tax -- now moves to the full House, where it faces uncertain prospects. Because it's a constitutional amendment, support from a three-fifths super majority of House members is needed for the bill to advance.

"We had to get this step completed first, and now we'll go to the next process," said Rep. Tommy Thompson, D-Owensboro, a supporter of the local-option amendment.

The leadership of the Democrat-controlled House is divided on the issue. Louisville Democrat Larry Clark, the House speaker pro-tem, voted against the local-option in the House committee Tuesday.

Shortly after the vote by the House committee on elections, constitutional amendments and intergovernmental affairs, House Speaker Greg Stumbo, D-Prestonburg, said he shared Clark's concerns.

"I think it's bad policy for the state, quite frankly," Stumbo said.

Stumbo also sought to define the movement as an effort to impose taxes on visitors to Kentucky's "centers of commerce."

"They live in areas where they get a lot of traffic because they have universities, they have medical centers, they are centers of commerce," Stumbo told reporters. "They get a lot of traffic from people outside their communities. So what they really want to do is transfer this tax to those people so they can build parks for the people that live in the cities."

Fischer and Lexington Mayor Jim Gray have been among the most vocal advocates of the local-option plan, which would allow cities and counties throughout Kentucky to fund public projects with a local sales tax of up to 1 percentage point, which would be added to the statewide sales tax of 6 percent.

Voters of the city or county would get to approve the temporary tax increase and the projects it would fund in a local referendum.

But the push has also included small-town public officials, and last week the Southeast Kentucky Chamber of Commerce -- which represents Stumbo's home county -- backed the plan at a hearing in Frankfort.

Clark, Louisville's most powerful state lawmaker, said Tuesday that he thinks any addition to the sales tax should be for statewide priorities like K-12 and higher education.

"If I'm going to vote for a sales tax increase, I'll use money to fund education at the state level," Clark said.

Representatives from the Kentucky Retail Federation and National Federation of Independent Business testified against the bill, raising concerns about out-of-state competition and increased costs of equipment purchases, among others.

Despite opposition from Stumbo and Clark, Fischer said Tuesday: "We've done an unofficial vote count and we think we have the votes on the (House) floor to make this happen."

The proposal must get a three-fifths approval in both the House and Senate, and then be ratified by a majority of voters in a statewide referendum at the ballot box in November.

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