Thursday, April 13, 2000

Public fumes over phone tax

Lawmakers: Cuts offset it

BY Patrick Crowley
The Cincinnati Enquirer

        RICHWOOD — Joe Komar lives in Boone County and frequently calls his family in Pennsylvania. He has never had to pay sales tax on the calls.

        That is about to change. Mr. Komar, a retired salesman with HVC Chemical and a Boone County GOP activist, is bewildered that Republicans in Frankfort have agreed to levy a sales tax on such calls.

        “I've been a good Republican forever, and I just can't believe this,” Mr. Komar said Wednesday. “The Republicans down there went along with a tax increase and loaded up the budget with pork. It really ticks me off.”

        Kentucky lawmakers are expected to pass a state budget Fridaythat imposes a 6 percent sales tax on out-of-state long distance phone calls.

        Tuesday night the GOP-controlled state Senate approved the sales tax plan, but they — along with most Democrats in the General Assembly — are saying that the tax increase isn't an increase at all.

        Lawmakers claim the money raised by the increase will be offset by cutting other taxes, such as the unemployment tax paid by business owners.

        “It's revenue neutral,” said Senate President Pro Tem Dick Roeding, R-Lakeside Park, who voted for the tax plan. “We're not raising the overall tax burden on people because we have an increase as well a decrease.

        “So it's not a tax increase.”

        Voters like Jack Segura aren't buying that explanation.

        “That's a lot of political double-speak,” said Mr. Segura, 50, a Fort Thomas resident who works for Federal Express.

        “That sure sounds like a tax to me. They might not want to call it a tax, but if I'm not paying a tax on those calls now and I will be in the future, that's a tax increase any way you look at it,” he said.

        Many lawmakers are acutely aware that even a detailed explanation of the plan may not convince voters that the plan is “revenue neutral.”

        “A lot of times in politics, perception is reality,” said Sen. Jack Westwood, R-Erlanger. “I believe this plan is revenue neutral. But I'm not sure all the people back home will believe that.”

        Betty Bowles certainly doesn't.

        Mrs. Bowles, 51 of Newport, who works at the Cook ie Jar Bakery in Newport, laughed when she heard the official “revenue neutral” rationale of the tax plan.

        “They're side-stepping the issue by saying something like that,” Ms. Bowles said. “What gets me is we have something that isn't being taxed, so what do they do? They go and tax it.

        “We're taxed enough. Leave us alone and let us have our money.”

        Democrats are also backing the plan and are expect ed to go along with the budget that includes the phone tax.

        Mr. Komar said Republicans were elected to the legislature on pledges not to raise taxes. He's miffed that money will be used to pay for projects in lawmakers' legislative districts.

        “That's just raising taxes to pay for pork.”

        The legislature also had the ability to cut the tax vehicle owners pay each year when they renew their license.

        Voters in Kentucky approved a state constitutional amendment in 1998 that gives the legislature the authority to cut the vehicle tax. Since the constitution requires that all property in the state be taxed, the amendment had to be approved by voters before lawmakers could act.

        But the General Assembly will adjourn the 2000 session Friday without cutting the vehicle tax.

        “That's what has me really steamed,” Mr. Komar said. “They didn't cut that tax but they raised the phone tax. I can't tell you how disappointed I am in what has taken place down there.”


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