Sunday, November 26, 2000

Vehicle tax still stuck in Assembly

By Patrick Crowley
The Cincinnati Enquirer

        More than two years ago, 80 percent of Kentucky voters approved a Constitutional amendment that gave state lawmakers the authority to reduce or repeal an annual tax on motor vehicles.

        Many assumed the tax would be cut, if not eliminated, during the General Assembly's 2000 legislative session, which was held from January to April this year. But partisan bickering over spending, taxes and the state's budget prevented the tax cut from ever coming up for a vote.

        “Most people thought that the tax was going to be dealt with earlier this year when we met in Frankfort,” said state Rep. Tom Kerr, D-Taylor Mill, who has been working to cut the tax since 1986.

        “But a lot of people are upset that hasn't happened.”

        Lawmakers predict the tax will be addressed when the legislature convenes in February. What isn't clear is how much of the tax will be cut and if it will be phased out over several years.

        “It's an onerous tax that people don't want to pay,” said House Majority Caucus Chairman Jim Callahan, a member of the House budget committee.

        “But it would irresponsible for us to go to Frankfort in February and just do away with the tax,” the Wilder Democrat said. “We have to make sure we can afford to cut it.”

        Vehicle owners pay the tax annually at their county clerk's office when license tags are renewed. It is based on the value of a vehicle, so the newer a vehicle, the higher the tax.

        At least three bills, including one by powerful House Floor Leader Greg Stumbo, D-Prestonsburg, have already been filed. All cut the tax, but none of the legislation calls for its complete elimination, Mr. Callahan said.

        “I think what you'll see happen in Frankfort, and what in my mind is the responsible thing to do, is cut the tax by 30 percent, which is the state's portion of the tax,” he said.

        The remaining 70 percent goes to school districts, cities, health departments, libraries, fire districts and counties, he said.

        The Northern Kentucky Chamber of Commerce has estimated that the area's 14 school districts would lose $8 million annually if the motor vehicle tax were completely repealed.

        “We can cut the state's portion, but if we eliminate the entire tax we're taking money away from schools, libraries, fire departments, cities and counties,” Mr. Callahan said. “Those cuts would be felt on the local level for years to come.”


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- Vehicle tax still stuck in Assembly
Tristate A.M. Report