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Chamber pushes for local-option sales tax

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Recommendation introduced to legislators

By Ben Sheroan

In the interest of community development, a business organization is asking legislators to give local government a chance to collect revenue at every cash register.

A constitutional amendment authorizing a local-option sales tax has support of the Hardin County Chamber of Commerce. The group’s board of directors unanimously endorsed the concept and met with four legislators to begin promoting the idea.

The proposal would enable county-by-county referendums allowing voters to consider local community-improvement projects to fund with the new sales tax revenue. Based on state figures from 2011, a 1 percent tax on Hardin County’s retail sales would yield more than $6.15 million annually.

State Sen. Dennis Parrett, who introduced a similar bill that got little attention in a previous legislative session, said the proposal faces an uphill fight in the General Assembly.

“It will be a struggle to get it passed,” he said Friday following a private luncheon meeting with chamber officials.

Parrett said the idea appeals to him because its grassroots-approval process places taxation authority with voters.

“It’s not done by Frankfort or by fiscal court or a city council,” the Democrat said. “It’s decided by voters. It puts it down on the local level and local voters can decide.”

The concept has been promoted actively by Louisville Mayor Greg Fischer, the Kentucky Chamber of Commerce and other organizations, including the Metropolitan Alliance for Growth which represents the state’s most populous counties. As Hardin County’s judge-executive, Harry Berry is part of that alliance.

Berry, a three-term Republican, said centralized control of taxation and revenue hampers local communities and concentrates power in Frankfort.

“This takes it out of the politicians’ hands and puts it in the people’s hands,” he said.

If the maximum 1 percent tax were implemented, consumers would pay another penny on top of the 6 cents per dollar state government collects now.

To approve a constitutional amendment, the enabling legislation would need 60 percent approval by both General Assembly chambers. It then would be placed on the ballot for consideration.

Approving the amendment does not implement the tax. Because it is a local-option measure, voters in each county would be asked to approve any tax in separate referendums that designate how proceeds would be spent.

Local governments would be required to designate the public improvement projects to be financed by the new revenue before asking voters to approve a sales tax.

All the revenue would be dedicated to those quality-of-life concepts such as parks, cultural attractions, recreational facilities, infrastructure needs or specific road improvements. Once the designated project is paid for, the tax would expire under the amendment’s sunset clause.

To continue collecting the 1 percent sales tax, local voters again would have to pass a new referendum designating new projects and needs.

As proposed to legislators Friday, development ideas would be determined at the county level.

State Rep. Jimmie Lee, D-Elizabethtown, said without finding a means to embrace city government input, the concept could not win legislative approval. He anticipates fierce opposition from the Kentucky League of Cities.

“You can’t cut the cities out,” Lee said.

In addition to Parrett and Lee, state Reps. Tim Moore, R-Elizabethtown, and Jeff Greer, D-Brandenburg, attended Friday’s discussion at Trino’s in Elizabethtown.

Chamber President Brad Richardson said legislators were encouraged to focus on the primary concept of local-option tax authority and not get tripped up by details that will be addressed in the legislative process.

Richardson said chamber leaders endorsed the sales tax based on results of its recent public policy survey. Of the 112 responses, 58 percent agreed local communities should have the option to invest in projects local voters consider important enough to fund.

“This is about self-determination,” Richardson said, “and being empowered to invest in our own community.”

Ben Sheroan can be reached at 270-505-1764 or bsheroan@thenewsenterprise.com.

 

In other business

 

In addition to input on a local-option sales tax, the Hardin County Chamber of Commerce announced results of other public policy survey questions.

 

  • 83 percent expressed dissatisfaction with the state tax system
  • 75 percent favor an independent panel to draft congressional and legislative boundaries, rather than the General Assembly
  • 74 percent support enacting a right-to-work law in Kentucky