Gray, Fischer Push For Local Option Sales Tax In Frankfort

Sep 25, 2013

FRANKFORT, Ky. - Mayor Jim Gray joined other officials to lobby for a Local Option Sales Tax before a legislative committee Wednesday.

Lexington Mayor Jim Gray pushes for Local Option Sales Tax in Frankfort
Lexington Mayor Jim Gray pushes for Local Option Sales Tax in Frankfort
Credit Josh James

Gray was among those arguing that a Local Option Sales Tax, which enables residents to vote to temporarily raise sales taxes to pay for local capital projects, would create jobs in Lexington and give taxpayers a voice in how the city chooses to develop.

"We all recognize that state government can't today afford to fund all our needs. That's why city and counties need the ability to increase their revenues but within limitations," Gray told the panel.

Still, not everyone is on board. Jason Bailey, Director of the Kentucky Center for Economic Policy, noted that sales taxes are regressive, placing a heavier burden on poorer Kentuckians.

"Low income Kentuckians pay two to five times more in sales and excise taxes as a share of their income than those on the upper end," Bailey explained.

And some committee members, such as Senator Damon Thayer, expressed skepticism that communities would take to the idea.

"I have not once in the 10 1/2 years I've been in the General Assembly had a constituent come up to me and say they want to pay more taxes and that's where I have a problem with this issue," Thayer said.

Mayor Fischer countered that 37 states now offer local sales tax options to communities and the effort has proven successful even in conservative states such as Oklahoma.

With a state constitutional amendment and a local option vote required before the idea could move forward, Gray says it’s unlikely Lexingtonians will see an option to help fund the Rupp Arena Arts & Entertainment District on the ballot. That project, he says, is moving on a faster track.