Lexington, KY - Lexington and Louisville mayors Jim Gray and Greg Fischer are not alone in their support of efforts to amend the state constitution to enable Kentucky’s cities to pay for local capital improvement projects out of their own pockets. The Kentucky League of Cities Executive Board which includes the mayors of 13 Kentucky cities voted earlier this summer to unanimously support an amendment of the state constitution allowing a local option sales tax.
“KLC is 100 percent behind this. Cities are in desperate need of additional revenue,” said Paducah Mayor and KLC Executive Board President William Paxton.
The road to a local option tax would be long and rigorous. Under Section 181 of the Kentucky Constitution, none of Kentucky’s cities is authorized to enact a local sales tax to finance local projects.
The General Assembly would first be required to pass a constitutional amendment by a super majority, allowing cities the tax option. A super majority is two-thirds in favor, instead of the customary 51 percent. Mayors would then need to pick a specific project to be funded for a set period of time. Ultimately local residents would vote to approve the tax on a project by project basis.
Most Kentucky mayors have supported a local option sales tax for over 20 years. While 38 other states allow the tax, Kentucky Legislators have shied away from the issue.
“I believe our legislators are so afraid that’s they’re going to be blamed for raising taxes and won’t get reelected. This way the blame is going to go to the local officials because we’re going to be the ones who implement it.”
Paducah Mayor Paxton says cities need the additional fund now. “Whether it’s pensions, insurance or overtime for firefighters, cities are being constantly hit up for additional monies. It’s leaving less money for quality of life issues like roads and parks. We were going to redo all of our parks with new baseball fields and new soccer fields. We were going to do something that was going to improve the quality of life of our people,” said Paxton.
The 2013 General Assembly could be the best chance yet for the tax. Governor Steve Beshear appointed Lt. Gov. Jerry Abramson to lead a 23 member Tax Reform Commission. They met for several months to familiarize themselves with the strengths and weaknesses of our tax system and then held public hearings across the state, including here in Lexington. Abramson says they’ll present their recommendations to the Governor by Thanksgiving. “The Local Option Sales Tax is an issue that I suspect you’ll hear more about from the governor and the commission,” said Abramson.
The Lt. Governor, who is the former Mayor of Louisville, has been a strong supporter of the option tax for years. “In this day and age, it’s a legitimate option to be made available to local communities. I’m a guy who is a strong proponent of local determination as it relates to projects and funding,” said Abramson.
He added, “Let the people at the local level make the decision of what they want to spend their money on.”
While mayors want to strike while the subject is hot, passage of the local option sales tax by the General Assembly is improbable. Senate President David Williams refuses to comment on the issue and Speaker of the House Greg Stumbo has already said he’s against the option tax.