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Local Option Sales Tax Dying Of Neglect In Kentucky Senate

Kevin Bratcher holds papers at desk during committee meeting.
Legislative Research Commission
Rep. Kevin D. Bratcher, R-Louisville, presents House Bill 3, a bill geared toward juvenile justice reform before the House Judiciary Committee.

The local option sales tax proposal is dying of neglect in the Kentucky Senate.

As the legislative session heads into its final days, the Senate has a full plate of bills to consider. And it appears the local option sales tax isn’t one of them.

The constitutional amendment would allow local governments to raise the sales tax by up to 1 percent if voters approve in local referenda. It has received strong support from Louisville Mayor Greg Fischer and been the focus of lobbying efforts from Greater Louisville Inc., the city's chamber of commerce.

Senate President Robert Stivers, a Republican from Manchester, said he supports the bill. But he won't shepherd it through his chamber.

“It’s not one of the issues that I’m out in front on, but if individuals can get a champion and garner the support, I will be voting for the bill,” he said.

Stivers reiterated his oft-repeated reinforcement of the bill, calling it “democracy in its purest form.”

Supporters say the legislation would allow local governments to decide upon and fund important projects in their communities, such as the planned Louisville Waterfront Park expansion.

The state House approved the bill earlier this year with a 60-31 vote. It passed the chamber last year with a 62-35 vote.

But the Republican-led Senate has been reluctant to take up the measure. This session, it hasn't even been assigned to a committee.

Sen. Damon Thayer, the Senate Majority Floor Leader and a Republican from Georgetown, opposes the bill, saying it amounts to a tax increase.

“I don’t think that’s the right approach for Kentuckians right now,” he said.

Thayer’s rationale has been the principal argument against local option legislation. And his position as floor leader obliges him to be the “traffic cop” for the Senate, helping decide which committees receive what bills and when they’re brought up for a vote on the floor.

Thayer said the bill doesn’t have much support in the Senate, where it would need 23 of 38 votes to pass because it's a constitutional amendment.

“I just don’t see it passing this session,” he said, adding that he might support the policy in a comprehensive tax reform plan.

Thirty-seven states have some form of local option sales tax.

Paducah businessman John Williams wrote in an op-ed last week that the measure would be an important tool for local governments as the state budget becomes increasingly strapped.

“While Frankfort previously provided partial funding or even full funding for important local projects in the past, citizens of the commonwealth should not expect that to be the case going forward,” he wrote. “If local citizens want to move their communities forward via a direct ballot, Frankfort should not stand in the way.”

Todd Griffin, president of the Kentucky Retail Federation, disagreed in his own op-ed, saying the measure is unfair to those Kentuckians who would pay taxes for projects they won’t use.

“This new tax will further divide Kentucky’s urban versus rural areas,” Griffin said. “Voters in rural communities that go to bigger cities to shop won’t have any say; they will only get to pay.”

The Senate is the last in line to review the state budget, meaning most of the chamber's energy in the final legislative days will be spent hammering out its proposal.

The legislature has only seven working days left in the session.