Kentucky House signs off on optional sales tax bill

The state House approved an amendment to the Kentucky Constitution Friday that would allow local governments to levy an extra sales tax of up to 1 percent to raise money for building projects.

House Bill 2, sponsored by Democratic House Speaker Greg Stumbo of Prestonsburg, got the necessary 60 votes in the chamber to win passage. Any bill that would change the state Constitution requires two-thirds approval in a legislative chamber.

The measure now goes to Senate, where it died in last year’s law-making session. It has enjoyed bipartisan support in the House. Republican floor leader Jeff Hoover of Jamestown was a co-sponsor.

If the Senate approves the bill, the issue of a local-option sales tax would be decided by voters on November’s ballot.

Under the proposal, money from the tax could only be used for specific building projects and would expire once bonds for the project are paid off.

The measure has been strongly pushed by Louisville Mayor Greg Fischer and Lexington Mayor Jim Gray, who is a Democratic candidate for U.S. Senate.

Opponents of the bill, such as Democratic Rep. Jim Wayne of Louisville, said the tax is a bad idea and would cost people making an annual income of $16,000 or less an additional $170 a year.

But Rep. Brad Montell, R-Shelbyville, said the bill puts the issue of taxation “directly to the people.”

The House also approved on a 55-36 vote House Bill 374, which spells out how the local option tax would be implemented.

This story was originally published March 11, 2016 at 12:39 PM with the headline "Kentucky House signs off on optional sales tax bill."