House panel approves local-option sales tax, but vote in House is uncertain

March 11, 2014 | | Comments 0
House Speaker Greg Stumbo, D-Prestonsburg

House Speaker Greg Stumbo, D-Prestonsburg

By Jack Brammer

FRANKFORT — A proposal to give cities and counties the option of asking voters to support a sales tax increase for local projects cleared a state House panel Tuesday, but it’s future in the full House looks doubtful.

Minutes after the House Elections, Constitutional Amendments and Intergovernmental Affairs approved House Bill 399 on a 6-3 vote, House Speaker Greg Stumbo called it “bad policy” and said he did not know if the House will vote on it.

The five House Democratic leaders, which control the flow of bills to the full House, are divided on the issue.

Stumbo, of Prestonsburg, and House Speaker Pro Tem Larry Clark of Louisville expressed concern that the bill would limit the state’s ability to increase the sales tax statewide at some point in the future.

But House Majority Whip Tommy Thompson of Owensboro and House Majority Caucus Chair Sannie Overly of Paris favor the bill, which is backed by Lexington Mayor Jim Gray and Louisville Mayor Greg Fischer.

House Majority Leader Rocky Adkins of Sandy Hook said late Tuesday he has no problem with the bill and that leadership will “vet it among our caucus, the whole House, take a vote count and proceed accordingly” to determine if there will be a House vote on it.

“We are not handling this any differently any other high-profile piece of legislation,” he said.

House Bill 399 calls for a constitutional amendment that would have to be approved by voters in November.

If the amendment is approved, communities could decide to raise the 6 percent sales tax by up to 1 percent for specific capital projects or programs.

Voters in a community would have to approve each sales tax increase. Once the project is paid for, the sales tax would automatically expire.

Thirty-seven states allow local-option sales taxes.

In addition to Gray, Fischer and Gov. Steve Beshear, dozens of mayors and county judge-executives have endorsed the plan. So have other groups, such as the Kentucky Chamber of Commerce, Kentucky League of Cities and the Kentucky Association of Counties.

In Fayette County, a 1 percent increase in the sales tax would generate an estimated $34 million each year.

Fischer and Brad Richardson, president and chief executive officer of the Hardin County Chamber of Commerce, told the House panel Tuesday that HB 399 would give people a say on how their tax dollars are spent.

But Tod Griffin, president of the Kentucky Retail Federation, and Tom Underwood, state director of the National Federal of Independent Business, said small businesses oppose the measure.

A recent Bluegrass Poll — conducted from Jan. 30 to Feb. 3 for the Herald-Leader, Louisville Courier-Journal, WKYT-TV and WHAS-TV — showed that 60 percent of registered voters favor the constitutional amendment and 24 percent oppose it. Sixteen percent were undecided.

Filed Under: Greg StumboKY General AssemblyLexington GovernmentRocky AdkinsSannie OverlySteve Beshear

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