New opposition could derail Local Option Sales Tax in Ky. Senate - WDRB 41 Louisville News

New opposition could derail Local Option Sales Tax in Ky. Senate

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FRANKFORT, Ky. (WDRB) -- An organization representing some of Louisville's largest employers -- including Ford and GE -- says it is against the proposed Local Option Sales Tax.

An association called Kentucky Industrial Utility Customers sent a letter to state lawmakers opposing the bill which would allow local voters to approve a temporary one-percent sales tax increase to fund local projects.

KIUC says Local Option could cost companies an additional $24 million dollars a year on their energy bills. Residential power bills are exempt from sales taxes, but industrial power bills are not.

"It could very well be a game-changer now that you have these major employers in our community that affect so many in our community, are now objecting to the cost to them," said Rep. Jim Wayne (D-Louisville) a vocal opponent of Local Option.

The bill has already passed the House, but Senate Majority Floor Leader Damon Thayer (R-Georgetown) says the new opposition could derail it in the Senate.

"It impacts the debate greatly, and probably makes people question whether we need to pass it this year or not," he said.

Gov. Steve Beshear says he's confident the bill can be tweaked.

"The implementation legislation can be worked to where we don't put our industrial companies at a disadvantage at all," said Beshear.

But Thayer says time is running out in this session, and there are bigger priorities, especially since Local Option requires a constitutional amendment that can't go on the ballot until 2016.

"With this not being able to go on the ballot until next year, it kind of gets pushed down a notch in terms of its urgency," said Thayer.

A spokesperson for GE says the letter does not represent the company's position on Local Option.

“While KIUC members may have legitimate concerns about the impact on their electricity rates, of an increase in the sales tax, that concern should have been expressed in a request for an accommodation that recognizes the importance of Kentucky's relatively low electricity costs in attracting and retaining industry, not by a broad-side attack on the bill,” said GE's Kim Freeman in an email statement.

A spokesman for Local Investments for Transformation, a group lobbying for the bill, said supporters are working on a solution.

Lawmakers WDRB News spoke with had not yet received the letter, but acknowledged its very existence is changing the debate.

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