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Louisville Mayor Greg Fischer said a local option sales tax is an “exercise in democracy” and an exercise in allowing local communities to identify and pay for their own needs.
Fischer advocated the option Wednesday during the Hardin County Chamber of Commerce’s monthly luncheon at Pritchard Community Center on behalf of Local Investments For Transformation, LIFT for short, a statewide initiative created to jumpstart support for a 1 percent temporary sales tax to pay for community driven projects, such as parks, roads, cultural attractions, libraries, public transit and recreational facilities.
Fischer said 37 states already have legislation to enable local option sales taxes to pay for community projects, but the option is not available in Kentucky.
For it to be possible, the Kentucky General Assembly must authorize a statewide referendum for an amendment to the Kentucky Constitution.
If the amendment is successful, Fischer said, local cities and counties could propose and prioritize projects that could receive funding through the temporary tax, which would be added to the state’s 6 percent sales tax. The money only could be used on that project and would not benefit a government’s general fund, Fischer said.
Communities would vote through local elections to approve or reject the tax, and the tax would end when the project is paid off. Taxes also would not overlap because each would require a new referendum vote.
Fischer said the benefits of a local income sales tax could bring jobs to communities to ensure they remain competitive. It also would put them in control of their own destinies in handling local needs that cannot be funded by existing city and county coffers as budgets are stretched. Fischer named several counties and cities around the state that desire aquatic facilities, fire stations, fire trucks and YMCAs but have no means to pay for them through traditional avenues, requiring an alternative means.
“The local option gives us that tool,” he said.
While he views the concept as a no-brainer for Kentucky, he said “nothing is a no-brainer” when in comes to Frankfort.
The state legislature is expected to hear more about the proposal during its session which started Tuesday, after LIFT worked to raise awareness about the benefits last year. Fischer said supporters intend to launch a “full court press” this year to get it on the ballot. Communities would not be required to participate if a local option sales tax becomes available.
Interest in the initiative appears to be growing, he said, and the Hardin County Chamber of Commerce has voiced its support for the endeavor. Fischer said the local chamber joined peers around the state in recognizing its potential impact.
Brad Richardson, executive director of the Hardin County Chamber of Commerce, said he has been involved in economic development for decades and heard the local option sales tax concept tossed around for years. However, he said it has never gained this much attention before.
“It’s never gotten this far,” Richardson said.
Fischer said some politicians may decry the local option as simply another burdensome tax, but allowing a vote on a constitutional amendment actually is supporting democracy in action and giving voters the right to choose.
“This is really a transformational tool for all of us in Kentucky,” Fischer said.
Marty Finley can be reached at 270-505-1762 or firstname.lastname@example.org.