George Myers,?LFUCG Eighth District councilmember:
Government should continuously evaluate the efficiency and effectiveness of its spending habits, particularly when considering raising revenue. However, it is clear that the Commonwealth?s Constitution severely restricts the ability of local communities to fund projects critical to remaining competitive.
In order for the Commonwealth to enhance its competitive advantage, drive economic development and create jobs, its citizens need to have some level of self-determination. Amending the state constitution to allow a local option sales tax will empower communities to prioritize and finance local projects that once completed, will enhance Kentucky?s position as a destination state and increase shared revenues.
San Antonio and Oklahoma City are reaping the benefits from a more decentralized state tax structure that has allowed for dozens of citizen-driven projects, funded by local option sales tax. These benchmark cities have raised and invested hundreds of millions of dollars in developing river walks, ballparks, trails, civic centers and music halls along with community health and education initiatives, just to name a few. These investments have created new jobs and revenue streams, while increasing tourism and enhancing the quality of life.
Kentucky?s current tax structure is one of the nation?s most centralized and lacks local input. This, in turn, hampers the ability to effectively govern and respond to local needs. It is estimated Lexington could capture $50 million annually through a one-percent sales tax in a normal year (absent an event such as the 2010 World Equestrian Games).
What are the opportunity costs of not acting within the next General Assembly?s legislative session? Changing our state constitution to empower our communities to enact a local option sales tax will drive economic development and job creation, while fostering an environment in which the rising tide raises all ships. If not now, then when? If not this, then what?
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Jon Steiner,?executive director/CEO of the Kentucky?League of Cities:?
Imagine a business in today?s economy trying to succeed using only the tools available 100 years ago. Unfortunately, this time-warp is a reality for Kentucky cities. The Kentucky Constitution limits cities to the same revenue sources and tax scheme that existed in 1891. In many cities, these tax options are maxed out and do not offer the flexibility necessary to fit community needs; moreover, the antiquated model forces the burden almost entirely on local residents and businesses.
Cities must have the flexibility to respond to an evolving economy, and a constitutional amendment would provide cities the tools they need to tailor local taxes to leverage a community?s strengths. A constitutional amendment is the only path forward to enable cities to undertake the kind of investments needed to improve the quality of life of Kentuckians for generations to come.
What could be more democratic than authorizing citizens to vote on how to pay for projects and programs in their own communities? Lexington?s business leaders have seen first-hand the positive impact of such local decision-making in San Antonio and in Oklahoma City. The use of local option sales taxes created wholesale change in the quality of life in these communities. A river-walk, state-of-the-art convention centers, libraries, parks, office and commercial development and a stadium have created tourist magnets, which have spurred thriving business environments and shifted much of the tax burden away from locals.
Alas, Kentucky is one of only 14 states ? and the only state in the Southeast ? that does not allow at least some use of a local option sales tax. A change in Kentucky is long overdue. Let communities and their residents make local decisions at the local level to bring their visions for the future to life before we get left in the 19th century.
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Rep. Bill Farmer,?R-Lexington (88th District):?
Authorizing a local sales tax for municipalities is in some ways like getting a new credit card. It?s exciting to think about all the things you can buy with that new line of credit ? until the bill comes.
Kentucky is not a referendum state, and those that are, like California and Ohio, have dealt with tremendous budget deficits. While I certainly understand there are times that cities must replace or renovate facilities and need funding to do so, allowing local sales tax referendums is not the way to go about it. If we allowed a one percent increase in a local sales tax, who is to say that a few years down the road that same city would want another increase of one or two percent?
Governments at all levels face the same problems that families face on a regular basis: knowing the difference between wants and needs. If the roof needs to be replaced, that expense should take priority over your desire for a nice vacation. Cities must be prepared to make similar decisions based on their own individual circumstances.
Finally, if there is a new source of tax dollars from a sales tax, there is always the risk of people forgetting the intended purpose. Sure, the current mayor may recognize those dollars are for Project X, but a few years down the road, the purpose for those dollars is forgotten and they turn into general fund dollars that are allocated along with property taxes and occupational taxes.
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Jamie Clark,?geothermal sales at Arronco comfort air:?
Lexington can no longer be a fiscal island. I believe Kentucky should amend our constitution to allow local governments to enact a sales tax because our current payroll-based tax system puts Fayette County at a disadvantage and forces our citizens to pay more than our fair share of taxes. Because local governments are not allowed to tax based on consumption, such as a sales tax, they are forced to add creative taxes by way of franchise fees for utilities, fees on your cell phone and Internet, and even additional taxes on your home and auto insurance. All of these taxes (you can call it a fee all you want to, but it?s still a tax) add to quite a load on the backs of Fayette County citizens. We alone are paying for services like streets and roads, police and fire departments, and even civic and social events that are being used by all of the citizens of our expanded metro area. Lexington-Fayette County is the shopping, entertainment and medical center for almost 100 miles in any direction. On any given day, especially on weekends and during UK basketball and football games, as many as 40 percent of the people in Lexington do not live or work here. A one percent sales tax would allow all of these people to contribute to our economy and to help us continue to make Lexington a great city without further burdening the citizens that live and work here. We need to embrace the fact that we are the unofficial capital of central and eastern Kentucky and work with our eastern Kentucky legislators to help us pass legislation that will allow Lexington to spread our tax burden in a manner that is fair to all.
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Alan Stein,?founder of SteinGroup, former president?and CEO of the Lexington Legends:?
Absolutely. Our difficult economic times have, rightfully, given us pause as we as a society grapple with the questions of how to address the concept of the ?greater good.? No longer do we have the luxury of taking care of our less fortunate, investing in great new ideas or building better places to live without having a legitimate conversation about how to best use our dwindling economic resources. We are in a new age of responsible allocation of our resources: human, physical and economic. This sounds simple ? we elect folks to examine the pros and cons of how these resources will be spent and hope for ?the best.?
Unfortunately, we?re not getting ?the best? when it comes to these ?discussions.? Partisan politics and high-decibel shouting have replaced a thoughtful and sometimes compromising approach to determining what might make us better as a community. It?s time to let us, the public, decide what values we want to have available to us in the marketplace of ideas that can carry us on the path to becoming the ?great city? the overwhelming majority of us want Lexington to become. Recognizing that our current resources are indeed limited, to accomplish great things we need to at least have other options available to us. Without weighing in on WHAT we should do to become great, I?d rather see us have an informed discussion of what?s important to us and what?s not. However, without all options available to us, these sorts of discussions are mere academic exercises and nothing more than dreams and wishes.
Dreams are what make great societies, great communities and indeed, great people. Let?s demand that our local leaders, both in City Hall and in Frankfort, recognize that they can trust us, the people, to make the right decisions in moving us forward into an exciting new future. We have great dreams. Let us have the ability to make them come true, if we so choose.
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Phil Holoubek,?president, Lexington?s real estate company:?
Yes. Citizens should certainly have the right to vote for or against a local option sales tax. Currently, we?re not given the opportunity for our voice to be heard. Additionally, we?re the most ?taxocentric? state in the country. We?re not the most heavily taxed, but we do give the largest percentage of our local tax dollars to the state level, of any state in the country.
I?m not suggesting that ALL local taxes need to be kept in the local community. But, at the very least, we shouldn?t be forced to keep the LEAST amount of local taxes in our own communities, without having a say in the matter. Certainly, we should have the right to vote whether or not to we want to generate additional local taxes and keep them in our community for capital projects.
This approach has worked well in numerous other cities, including Oklahoma City. Their incremental tax has led to improved school buildings, new parks, a new library, new sports facilities, and a much needed renovation of their downtown, including the creation of Bricktown. These projects improved quality of life and led to economic development successes, including the recruitment of corporate headquarters to their downtown. These tangible benefits are a key reason that the tax, when it has come up for renewal, has been easily approved by voters several times.
As always, full transparency and trust in local government were critical success factors, as was?the inclusion of a ?sunset clause? on the local option sales tax, which would need to be included in any proposal for Lexington.
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