BY PATRICK CROWLEY
The Cincinnati Enquirer
COVINGTON -- Northern Kentucky's leading business group has given lukewarm support to a ballot measure that will allow state lawmakers to cut property taxes.
The Northern Kentucky Chamber has given a "cautious" endorsement to a state constitutional amendment on the ballot this fall. If passed by voters, the legislature could exempt personal property, such as cars, from any or part of the property tax.
While the chamber does advocate lower taxes, the group -- which has nearly 2,000 members -- is concerned school districts in Northern Kentucky will lose too much money if the state's motor vehicle tax is eliminated.
"We support the Kentucky legislature having the ability to lower or eliminate taxes such as the intangible personal property tax and others which might restrict personal investment and economic growth," said chamber board chairwoman Juanita Mills of JM Consulting. "Unfortunately, unpopular ones like the motor vehicle tax represent a significant revenue source for schools and local governments that may be difficult for them to recoup," Ms. Mills said.
The chamber estimates that Northern Kentucky's 14 school districts would lose an estimated $8 million annually if the motor vehicle tax is repealed.
The chamber's board of directors is supporting the amendment, but said in a statement it will work with lawmakers and the schools to identify means to restore any lost revenue to Northern Kentucky's schools.
House Majority Caucus Chairman Jim Callahan, D-Wilder, said he believes voters will pass the amendment on Nov. 3, election day. "It's a good amendment because it puts control in the hands of the General Assembly," Mr. Callahan said. "And there are other taxes besides the automobile tax that can be eliminated or reduced once the amendment passes."
But should it pass Mr. Callahan expects calls from legislators to repeal or reduce the automobile tax.
"It's not a popular tax, and I hate it like everybody else who has to pay it," Mr. Callahan said. "But at the same time you have to be careful about taking money away from school systems."
For instance, the Fort Thomas Schools will lose about $600,000 a year, Mr. Callahan said.
"If you take that money away, you have to look how you're going to make it up," he said.
There may be a compromise pursued in the legislature where the portion of the car tax that goes to schools would not be eliminated, Mr. Callahan said.
Schools get more than half of the car tax. The rest is split between services such as libraries, fire districts, cities, extension services and the Transit Authority of Northern Kentucky.
Kentucky's constitution requires all property to be taxed at its fair market value, with few exceptions. The amendment would add more discretion on personal property.
Personal property includes cars and intangibles such as mortgages. Approving the amendment would mean the General Assembly could tax personal property at any rate or eliminate taxing it altogether.
