Local Sales Tax Option Moves Forward

Mar 11, 2014

Credit wkms.org

Giving local governments the option of putting a sales tax increase before its residents remains alive in the current legislative session.  But, based on comments from a key leader, its chances of passage appear slim. 

 The House Committee on Elections, Constitutional Amendments and Intergovernmental Affairs approved the constitutional amendment bill Tuesday.  Bill Sponsor Tommy Thompson realizes passage before the full house will be challenging.  

 “We’ll go to the floor, talk to the members, continue to discuss, continue to provide information and we’ll see where it goes.  This is a fluid process.  I think this particular bill has some great momentum for a good reason,” said Thompson.  If approved by a statewide vote, the bill would give localities the right to put a tax increase proposal before their residents.  Louisville Mayor Greg Fisher says it amounts to a reinvestment option.    “To have a vital business, you have to reinvest in your business with capital equipment," said Fisher.  "Cities are no different.  If you don’t invest, you shrink and fade away."   The revenue from a local sales tax could be used for individual projects.  Louisville Representative and House Speaker Pro Tem Larry Clark doesn’t support his mayor’s proposal.     “This does nothing to help the state coffer.  I’m a state legislator and I’ve said publicly and I’ve told the mayor, if I’m gonna vote for a sales tax increase, I’m gonna use money to fund education at the state level.  Therefore, at this time, I’m gonna vote no,” said Clark.      Proponents says the measure is not endorsing a tax increase.  They say it just allows municipalities to put up to a one percent sale tax on local ballots.  Tom Underwood, State Director for the National Federation of Independent Business says higher prices do impact bottom lines of small retailers.     “Particularly when you get into some of the larger ticket items like appliances and things like that," said Underwood.  "One percent adds up, so you have people shopping for price.  They’ll cross jurisdictional boundaries."    Afterwards, House Speaker Greg Stumbo said he had reservations about the bill.  He says local governments already have the option to raise payroll or property taxes.