Mayor Jim Gray urged state leaders Thursday to allow cities and counties the option of asking voters to support a sales tax increase for local projects and initiatives.
House Bill 399 is not a bill that will raise taxes. It's about giving people a say on how their tax dollars are spent, Gray said.
"It's a big part of the American DNA, just giving folks the right to vote" Gray told the House Economic Development Committee on Thursday. "We're simply asking you to give the people an opportunity to vote on specific projects through a local option sales tax."
The House Economic Development Committee did not vote Thursday on House Bill 399. Backers of the initiative say they are hopeful that they can get the issue passed this legislative session.
But time is running out. Thursday was the 36th day of the 60 day legislative session. The issue still faces some resistance in the Republican-controlled Senate, which has traditionally balked at any mechanism to increase taxes.
"The more we talk to folks about it and the more they understand that it's not a tax increase, the more support we get," said Eileen Pickett of the Local Investments for Transformation, or LIFT coalition, which is backing the measure.
House Bill 399 and Senate Bill 135 call for a constitutional amendment that would have to be approved by voters in November. If the constitutional amendment is passed, communities could decide to raise the sales tax by up to 1 percent for specific capital projects or programs. The current sales tax is 6 percent. Some communities may never use it. Others may only choose to increase the sales tax by less than 1 percent, Pickett said.
The voters in that community would have to approve the sales tax increase. Once the project is paid for, the sales tax is removed, backers of the bill said Thursday.
Thirty-seven states allow local option sales taxes.
In addition to Gray, Mayor Greg Fischer and dozens of other mayors and county judge-executives have endorsed the plan. So have other groups such as the Kentucky Chamber of Commerce, Kentucky League of Cities and the Kentucky Association of Counties.
A 1-percent increase in the sales tax for Fayette County would generate $34 million in additional tax dollars, according to estimates provided by LIFT.
But Gray said Thursday that a local option sales tax would not be used to pay for the redesign of Rupp Arena and the convention center. Gray unveiled the $310 million design for the arena earlier this month. A financial plan on how to pay for the redesign has not been released.
Rep. Kim King, R-Harrodsburg, said Thursday she has heard support from elected leaders for local option sales taxes. But citizens do not, she said. "I have not spoken with a single individual that was for it," King said.
A recent poll conducted by several media organizations, including the Lexington Herald-Leader, showed that 60 percent of people favor a local option sales tax.