Is LOST (local option sales tax) another unelected taxing authority?

Posted by on December 7, 2014
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Why do some politicians love to mislead voters? Think of it this way: A politician names his dog 5 Miles. He brags to his constituents that he walks 5 Miles every day. They believe he’s an exercise machine. He knows he’s lying, but sleazy politicians like to imply a false message with two meanings to fool stupid people.

Here’s an example. Tax-takers latest effort to separate you from your hard earned money is called LOST (local option sales tax). Their goal is to amend Kentucky’s Constitution during the 2015 General Assembly with a LOST amendment that will permit any city or county to place on a ballot a 1 percent sales tax INCREASE to finance special projects.

I have 4 questions.

1. Why is LIFT Kentucky misleading voters if the LOST project is such a great idea?

LIFT stands for local investments for transformation. Their homepage’s tagline for the local option sales tax effort is “an additional one penny sales tax.” Why are they lying to the voters?

Let’s say my unelected neighbors vote to exercise our local option sales tax because our community wants to build a state-of-the-art animal shelter to teach cats how to read.

If I understand LIFT Kentucky’s website, the additional sales tax will be one penny. So if I head to my local car dealership and purchase a $35,000 car, my old sales tax would be $2,100 (6 percent). With the new LIFT Kentucky LOST increase of “one-penny,” my new sales tax would be $2,100.01. I guess pennies add up, but I don’t think it’s going to be much of an animal shelter.

Thank God it’s only “an additional penny sales tax”, because if it was a 1 percent sales tax increase, my new sales tax would be an additional $350. Is LIFT Kentucky involved in false and misleading advertising? Is Democrat Obamacare architect Jonathan Gruber crafting their message? Are they calling us stupid? Do they believe everything in Kentucky costs $1?

Why can’t they just tell the truth? Here are a few local advocates whose names appear on LIFT Kentucky’s website:

Kenton County judge-executive Steve Arlinghaus,

Boone County judge-executive Gary Moore,

Campbell County judge-executive Steve Pendery,

Crestview Hills Mayor Paul Meier, and

Covington Mayor Sherry Carran and the Northern Kentucky Chamber of Commerce.

Not only does Mayor Carran and the NKY Chamber of Commerce want to increase the local sales tax, they also want to install tolls (tax increases) on the Brent Spence Bridge. OUCH!

2. What should be the voting threshold for LOST passing the General Assembly?

In June of 2014, Michigan’s state senate rejected a local option sales tax proposal. I found it interesting that “the joint resolution would have required a constitutional amendment, meaning it needed support from a supermajority of Michigan lawmakers this week and a majority of voters in the November general election. It failed in a 14-24 vote but could still be reconsidered.”

Changing the Kentucky Constitution is a big deal. It should require a supermajority (67 percent in both chambers) to pass the General Assembly.

3. How will LOST tax-takers propose placing the local sales tax increase on the ballot?

I researched the LOST bills submitted in the 2014 General Assembly (SB135) and (HB399) to understand the requirements for placing a 1 percent sales tax increase on a ballot. I found no details. I did find that many states require a petition process. I wonder if Kentucky will do the same.

In Iowa, they offer two methods for placing LOST on a ballot. 

  1. A petition is presented to the county board of supervisors. The number of signatures must be equal to 5 percent of the persons in the county who voted in the preceding state general election. Eligible voters of the county must sign the petition.
  2. A motion or motions of governing bodies within the county that represent at least half of the population of the county.

Since no one trusts politicians today, the “We the People” petition process makes sense. The petition threshold should be placed, at a minimum, of 25 percent of voters in the last presidential election. That’s was the requirement for placing the Northern Kentucky Area Planning Commission on the ballot. It would only be fair for the petition threshold to be set at the same level to increase a sales tax as it is to eliminate an area planning tax.

Since general election turnout is substantially lower than presidential turnout, the presidential threshold should be implemented. For example, the 2012 presidential turnout in Kenton County was 68,181. The 25 percent threshold would require 17,045 validated signatures.

The 2011 general election voter turnout in Kenton County was 26,423. If the 5 percent in the last general election method is used, the petition threshold would only be 1,321. That number amounts to less than 1 percent of Kenton County’s population increasing our taxes. No thanks!

4. Haven’t Kentuckians paid obscene federal, state and local taxes, plus countless other taxes, to finance “special projects.” UNCLE!

It’s not Kentuckians fault politicians and bureaucrats have mismanaged Kentucky taxes. Here we go again. Government shows up and spews this narrative:

Yea, we’re broke. We wasted all your tax money. Money for those projects isn’t coming from the state or any other government coffers so it must come from taxpayers. We need more taxes for more special projects for special interest groups that finance our campaigns. This time we want to increase your local sales tax by 1 percent or one penny if you’re dumb enough to believe that. To show you how noble we are we’re going to let you pull the tax trigger on yourself.

Doesn’t that sound just like pro-tolls rhetoric? Why are governments with millions and billions of dollars permitted to claim they’re broke, but citizens are never permitted to invoke the broke defense?

According 24/7 Wall Street’s 2013 Best and Worst Run States in America: A Survey of All 50, Kentucky is ranked as the 38th worst run state. Kentucky has the 5th lowest median household income ($41,724) and the 5th highest percent of citizens below the poverty line (19.4 percent). Kentucky is one of the poorest states in the nation. Kentuckians are broke and can’t afford any more taxes.

Isn’t having a small percent of your neighbors with the power to raise your taxes just another unelected taxing authority? I thought Kentuckians hated unelected taxing authorities? Please follow this upcoming legislation very closely. Contact your state representatives and urge them to vote against LIFT Kentucky’s LOST agenda.

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Tom Wurtz

President at Tom Wurtz Consulting
Tom Wurtz is the President of Tom Wurtz Consulting and former President & COO of a $70 million consulting firm in Cincinnati, OH. He’s a leadership & profit consultant, keynote speaker, trainer, columnist, founder of the Eagle Leadership Academy and author of three books. He has published over 900 business and libertarian/conservative political articles. In 2012, he unsuccessfully ran for U.S. Congress in Kentucky’s 4th District. Tom resides in Fort Mitchell, Kentucky and has been married to his third-grade sweetheart for 38 years.

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