Sunday, March 12, 2000

Wait for tax cut irks drivers


Vote hasn't changed fee

BY PATRICK CROWLEY
The Cincinnati Enquirer

        FRANKFORT — In November 1998, Kentucky voters overwhelmingly approved a change to the state's constitution, giving the General Assembly authority to reduce — if not eliminate — the property tax on automobiles.

        But with the legislature's annual session just three weeks from completion and the vehicle tax cut extracted from Gov. Paul Patton's budget proposal, motorists will likely have to wait until the year's end for the much-hated tax to be reduced.

        That is likely to make vehicle owners, already miffed about paying the tax each year when they renew their license, even angrier as they wait for a tax break they approved at the polls.

        “People are upset about it,” said Campbell County Clerk Jack Snodgrass, whose office collects the tax as well as the complaints about it.

        “They tell us that they voted to do away with the tax and they don't understand why they are still paying it,” he said.

        Motorists may get the tax cut later this year, when legislators are expected to meet for a special session to deal with tax reform and other revenue-related issues, said House Majority Caucus Chairman Jim Callahan, D-Wilder.

        “I think we're seeing the groundwork being laid now for the tax to be reduced in a special session, but right now we're not in a position financially to take that $75 (million) to $80 million the tax raises out of the state's revenue stream,” he said, adding that the special session probably will be held in December.

        Motorists have complained for years about the tax.

        The tax is based on a vehicle's trade-in value and can amount to several hundred dollars for people with newer cars. Lawmakers have been under pressure to reduce the tax, and two years ago they took the steps to make that happen.

        Since the Kentucky Constitution requires that all property be taxed, the only way to reduce or eliminate the vehicle tax was through an amendment to the constitution passed by the state's voters.

        In the 1998 General Assembly session, legislators voted to put a constitutional amendment on the ballot to give the legislature the power to cut or eliminate the tax.

        The amendment was clearly sold as a tax-cutting measure and, not surprisingly, was approved with 78 percent of the voters. But there was con fusion about the effect of the amendment from almost the moment it was passed.

        “People came in the day after asking for their taxes to be decreased,” said Kenton County Clerk Bill Aylor. “But even people who voted for the amendment didn't understand that all they were doing was giving the legislature the ability to cut the tax. I think that was a big surprise to a lot of people.”

        Many voters and vehicle owners also believed that with their vote the entire tax would be eliminated, Mr. Snodgrass said. “But it's really up to the legislature what they want to do with the tax,” he said.

        While there are some lawmakers calling for repeal of the entire tax, most legislators are favoring cutting the state's portion. That equals 30 percent of the tax. The remaining 70 percent goes to local agencies like schools, libraries, fire districts and health departments. Most lawmakers do not want to take that money away from their communities.

        Mr. Patton's original budget included the cut on vehicle property taxes but was also laden with more than $200 million in tax increases. That doomed the budget, particularly in the Republican-controlled Senate. GOP senators made it clear to Mr. Patton that his first budget would not pass their chamber.

        So Mr. Patton submitted a scaled-back budget that did not contain most of his tax increases. But without those increases, the state could not afford to cut the auto tax.

        Some lawmakers still are optimistic that once Mr. Patton's budget gets to the Senate this week the vehicle tax cut will be revived.

        “I'm certainly hoping it does,” said Rep. Joe Fischer, R-Fort Thomas, one of several lawmakers who have filed bills to cut the tax.

        “The voters are expecting us to do something on the tax. They passed a constitutional amendment. We ought to live up to our end of the deal.”

       



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