Kentucky House Speaker Greg Stumbo says House Democrats' top priority for the 2015 legislative session could be letting local governments temporarily raise taxes to pay for large construction projects.
Stumbo had previously said the House would focus on legalizing casino style gambling in Kentucky, an issue pushed by the state's formidable horse racing industry and its popular Democratic governor.
But that changed when Churchill Downs, Louisville's iconic horse racing track, donated money to a political action committee dedicated to electing Republicans to the state legislature. Democrats have an eight-seat majority in the House, one of the last Democratic-controlled state legislative bodies in the south.
The local option sales tax would let local governments impose a temporary 1 percent sales tax to pay for large projects. Voters would have to approve the tax first.
A bill to amend the Kentucky constitution to allow voters to choose projects funded by a 1 percent sales tax has been delayed in the House.
The measure, championed by the mayors of Louisville and Lexington, does not have enough votes to pass in that chamber right now, according to Democratic Majority Whip Tommy Thompson.
“We have a few people that have some good questions about that don’t quite understand it, so we want to clear that up," the Daviess County Democrat said. "And then there’s a few more people that we wanted to talk to to kinda see where they were, but I think we’re very close.”
Thompson says the measure is shy by a number of votes “in the single digits,” and he expects it to come for a floor vote Monday.
The measure gained renewed momentum this week after House Speaker Greg Stumbo said he changed his mind after talking with Gov. Steve Beshear, who urged him to support it.
A series of bills that would amend the state constitution and implement a local option sales tax to fund city and county projects has won support in the Kentucky House of Representatives.
House Speaker Greg Stumbo said Thursday he now supports the bill following a conversation with Gov. Steve Beshear, and expects it to head to the House floor for a vote.
House Majority Floor Leader Rocky Adkins says the bill will likely be voted on Friday in order to give the Senate enough time to discuss it.
“I know that the issue is being worked right now, and don’t know myself … exactly where the vote count is, but I know there’s a lot of work going in by a lot of people to see if the votes are there to be able to bring it out here and debate it and see if it can more forward," said Adkins, a Democrat from Sandy Hook.
One House Republican had some strong words for Stumbo regarding his apparent about-face.
“It shows that he’s playing every side that he can," said Minority Floor Leader Jeff Hoover of Russell Springs. "He’s concerned about the political ramifications in November, and he’s playing every side that he can on every issue that he can and this is another example.”
If passed, the measure would go before voters this November, and would implement a 1 percent sales tax on top of Kentucky’s 6 percent sales tax to fund local projects.
Louisville Mayor Greg Fischer is continuing his push for the local option sales tax, which would let communities vote on temporary sales tax increases to fund projects.
The Democratic mayor is facing opposition to the plan, but not from where you might expect. Much of the criticism of the effort comes from the political left.
In a 15-minute pitch in Frankfort, Fischer extolled the civic virtues of a sales tax that he says would be used to fund local projects chosen by committee and placed on a ballot before voters.
“We need additional capital sources," the mayor told his audience. "In the case of Louisville, 11 years ago four percent of our general fund was for pensions. Today it’s 15 percent. So it’s like a business, we’ve had an 11 percent increase in our expenses, but we haven’t been able to raise our prices; that is, we haven’t had a tax increase.”
But fellow Louisvillian and fellow Democrat Rep. Jim Wayne cited a study that showed the local option means lower income residents would pay a higher percentage of their income in taxes than wealthier residents.
Though the effort for a local option sales tax lacks support from principals in the General Assembly, Mayor Greg Fischer and other leaders from Kentucky's largest communities still went to Frankfort on Tuesday to push for a constitutional amendment.
Calling themselves the Metropolitan Alliance for Growth, the group is creating its own draft of legislation for a local option sales tax—but they call it LIFT, for Local Investments for Transformation.
The alliance is encouraging lawmakers to tackle pension reforms and a constitution to allow a local option tax for infrastructure projects, to be decided by voters. The alliance—which Fischer and Lexington Mayor Jim Gray lead— is made up of local officials from the state's metro areas, including Lexington, Louisville, Bowling Green and Northern Kentucky.
Bearing in mind legislative leaders' reservation about the local option sales tax, Fischer said the alliance is on a campaign to education people.
The mayors of Lexington and Louisville believe Kentucky needs a local option sales tax to stay competitive. The tax is levied temporarily to finance public infrastructure projects, but an opinion issued this week by the Kentucky Attorney General’s Office says voters would first need to approve a constitutional amendment.
According to the opinion, local governments nor the General Assembly may enact a local option sales tax without changing the state constitution. The Courier-Journal reports the opinion was requested by the Louisville Metro Council. Louisville Mayor Greg Fischer and Lexington Mayor Jim Gray want counties to be able to locally increase the statewide sales tax and use the additional revenue for public projects. Voters would have to approve the tax and the projects it would fund in a local referendum.
In an opinion issued Monday by Attorney General Jack Conway, the first step would be amending the state constitution.