Local Sales Tax Option Passes House Committee

Mar 11, 2014

A plan to give local governments the ability to pay for capital projects with a temporary, one percent, sales tax increase is headed to the Kentucky House. The measure has cleared a committee, but faces difficult prospects.

Because it would amend the state constitution, the measure will need a super majority in both the House and the Senate. It would then go to the public on the November ballot.

House Democratic leaders are split over the bill. Speaker Greg Stumbo says rural taxpayers will end up with the bill for projects that will be used more by their urban counterparts.

But Louisville Mayor Greg Fischer, says Stumbo hasn’t really made up his mind.

“We’ll just keep educating folks. I mean, the input for Speaker Stumbo’s coming from all over the state, in terms of who’s for this bill, both rural and metropolitan areas,” said Fischer. “So we’ll hope he’ll listen to the people and be for the bill.”

Fischer has been the issue's chief cheerleader for years.

Bill Sponsor Tommy Thompson of Owensboro realizes passage before the full house will be challenging.

“We’ll go to the floor, talk to the members, continue to discuss, continue to provide information and we’ll see where it goes.  This is a fluid process.  I think this particular bill has some great momentum for a good reason,” said Thompson.

Tom Underwood, State Director for the National Federation of Independent Business says higher prices do impact bottom lines of small retailers.

“Particularly when you get into some of the larger ticket items like appliances and things like that. One percent adds up, so you have people shopping for price.  They’ll cross jurisdictional boundaries.”

Underwood says the sales tax option could mean additional records-keeping for an already burdened business sector.

Kentucky Public Radio's Stu Johnson contributed to this report.