Proposal to give local governments more advanced tax options

FRANKFORT, Ky. (AP) — A Kentucky House committee advanced a proposed ballot measure Thursday that could potentially give local governments more leeway to generate tax revenue to pay for services.

The proposed constitutional amendment, which passes the entire House, would go to a ballot for voters across the state to decide whether it wipes out the legislature.

The measure, if added to the Kentucky Constitution, would ease tight restrictions on the types of taxes city and county governments can levy to meet their obligations.

“There’s no way to really do comprehensive tax reform if we don’t go to the local side like we go to the state side,” said Republican Rep. Michael Meredith, the proposal’s lead sponsor.

Proponents of the proposal say the current restrictions force local governments to rely heavily on property taxes and payroll taxes. These limitations put Kentucky communities at a competitive disadvantage in trying to attract new business, they said.

Retailers have raised concerns about the proposal, fearing the constitutional change could eventually lead to new sales taxes that could hurt their businesses.

If the measure reaches the ballot and wins ratification, the Legislature will follow by creating a new framework for local governments in setting tax policy, Meredith said.

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The legislation is House Bill 475.

Donald E. Patel