Supporters: Local sales tax won't be used to pay off old debt - WDRB 41 Louisville News

Supporters: Local sales tax won't be used to pay off old debt

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Louisville Mayor Greg Fischer Louisville Mayor Greg Fischer

LOUISVILLE, Ky. (WDRB) -- Supporters of the proposed local-option sales tax say they're going to get rid of a provision that would allow Louisville Metro government to use the new tax to pay off debt already on the city's books.

The tax has always been sold as a way to pay for new capital projects -- not to pay off debt already incurred from previous projects or for other reasons.

Yet, according to the bill containing the details of the tax's implementation, Louisville Metro would be allowed to use the money for "the retirement of existing general obligation debt."

Chris Poynter, spokesman for Louisville Mayor Greg Fischer, said the phrasing was an oversight as bill drafters copied language from other states that have local-option sales taxes.

State Rep. Steve Riggs, a Democrat who represents the Jeffersontown area, said he will offer an amendment that will get rid of the "debt" provision.

With Riggs' amendment, the tax could be used to pay debt only on bonds issued to build the new projects specifically authorized by voters.

The issue came up Wednesday as the House local government committee took up HB 551, which spells out the details of how the local-option tax would be implemented. 

Earlier this week, a separate bill containing the constitutional amendment allowing the tax passed out of committee. The constitutional amendment now awaits a vote on the House floor.

Riggs said the House local government committee, which he chairs, will likely vote on the more detailed legislation next week after issues like the debt question can be cleared up.

So what could the new revenue be used for? The bill lists several possibilities for Louisville Metro. It does not suggest types of projects in other counties. Here are the types of "qualified projects" that could be pursued in Louisville (including the debt provision that will be taken out):

1. The construction, renovation, or planning of:

a. Roads, streets, bridges, sidewalks, bicycle paths, and multi-use or shared paths;
b. Government buildings used primarily for governmental functions, including but not limited to administrative buildings, police stations, detention and rehabilitation facilities, public libraries, public waste handling or recycling facilities, and major athletic facilities accommodating more than five thousand (5,000) patrons for a single event;
c. Historical, cultural, arts, or recreational facilities, including but not limited to theatres, ball fields, small arenas for public league indoor sports, public green space consisting of parcels not less than five (5) acres each, parks improvements, and the acquisition of land to be incorporated into existing parks;
d. Transportation facilities designed for the transportation of people or goods, including but not limited to railroads, port or harbor facilities, or mass transportation facilities; and
e. Hospitals or facilities providing inpatient medical or psychiatric services that are:
i. Owned by the consolidated local government or an incorporated city located within the consolidated local government; and
ii. Operated by the consolidated local government, a municipality, or by a non-profit, tax-exempt organization through a contract with a consolidated local government, or incorporated city within the consolidated local government;

2. Major public initiatives to enhance tree canopy, reduce heat islands, or enhance onsite percolation drainage;

3. The retirement of existing general obligation debt of the consolidated local government, one (1) or more incorporated cities within the consolidated local government, any other political subdivision within the consolidated local government, or any entity related to any of the listed entities;

4. Water or sewer projects to be owned by a public utility or an incorporated city within the consolidated local government;

5. A capital project:
a. Relating to public safety or airport facilities, and related capital equipment used in such facilities;
b. Located within the boundaries of the consolidated local government or outside the boundaries of the consolidated local government; and
c. Involving another local government or governments located outside the boundaries of the consolidated local government;
 
6. Public infrastructure technology projects; or

7. Any combination of the projects described in this subparagraph. 

 

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