Local-option sales taxes used for infrastructure projects that reshaped the city’s future
Mayor Mick Cornett shares city’s success at Leadership Louisville Luncheon
By Lorie Hailey
LOUISVILLE, Ky. (Aug. 30, 2013) — Over the past 20 years, Oklahoma City transformed itself from a city struggling with high unemployment and little economic development prospects into what Mayor Mick Cornett now calls “a big league city.”
Cornett shared the city’s success story Thursday with nearly 1,000 business, government, non-profit and civic leaders at the annual Leadership Louisville Luncheon, held at the Galt House in downtown Louisville. The Leadership Louisville Center designed this year’s event to spark a conversation about the importance of making choices to chart the future of Louisville and communities throughout the state.
Oklahoma City’s economy and employment rates are among the best in the nation. Infrastructure investments have reshaped the city, dramatically improving its quality of life. The transformation is one that can be duplicated in Kentucky, said Louisville Mayor Greg Fischer, who also spoke at the event.
Now recognized as one of the best places to live in the U.S., Oklahoma City invested millions in new and upgraded sports, recreation, entertainment, cultural and convention facilities. And residents paid for it all.
In 1993, voters approved a controversial local-option sales tax that would be used to revitalize the city’s downtown and improve its national image. City leaders hoped the project – called Metropolitan Area Projects (MAPS) — would make the city more attractive to job creators. At the very least, though, projects funded by the one-cent-on-the-dollar sales tax would give the residents a better city in which to live, Cornett said.
It took awhile for the project to pay off. The first MAPS projects began in 1993 and were completed Aug. 17, 2004. But, by funding the projects with a limited term, one-cent sales tax, the projects were built debt free.
The tax expired on July 1, 1999. During the 66 months it was in effect, over $309 million was collected, and the deposited tax revenue earned about $54 million in interest.
The revenue paid for Bricktown Ballpark, which became home to a AAA baseball team; the Cox Convention Center; improvements at the state fairgrounds; the Bricktown Canal; a new library/learning center; new trolleys; a near-rebuilding of the Civic Center Music Hall; improvements to the North Canadian River; and construction of the Ford Center.
Louisville’s mayor has touted the local-option sales tax as a way to fund improvements. But the Kentucky Constitution preempts Kentucky cities from levying a local option sales tax. Section 181 of the Kentucky Constitution does not allow the General Assembly to permit any unit of local government to levy an excise tax, which is a tax paid on the purchase of a specific good, according to the Kentucky League of Cities.
Thirty-eight states, including all of the states surrounding the commonwealth except Indiana, allow one or more of their local governments to levy a local-option sales tax.
Fischer encouraged Leadership Louisville attendees to ask their legislators to let Kentuckians vote on whether to amend the constitution to allow for local option sales taxes. (The taxes must then be approved by voters on a case-by-case basis.)
A Senate bill to do so failed in the 2013 legislative session.
For Louisville to continue to grow, the city must find ways to pay for large-scale development, Fischer has said.
A Courier-Journal Bluegrass Poll in February found that 72 percent of Kentucky voters favored the amendment, which would allow local communities to impose taxes for specific programs or projects. Only 19 percent said they opposed the amendment and 9 percent said they were not sure.
Residents of Oklahoma City have passed two more rounds of local-option sales tax projects: MAPS For Kids in 2001, which generated $514 million, along with a $180 million Oklahoma City Public Schools bond issue, which was used for school facility improvements, technology and transportation projects; and MAPS 3 in 2011, which is a $777 million 10-year construction program that includes a new downtown convention center, a new downtown public park, modern streetcar/transit program, river and fairgrounds improvements, senior health and wellness centers, trail and sidewalks.
In 2008, the citizens approved another short term one-cent sales tax after the MAPS for Kids tax expired to fund improvements at the downtown arena and build an off-site practice facility to accommodate the new NBA franchise, the Oklahoma City Thunder.
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