Friday, March 26, 1999
Car tag tax may be reduced
BY PATRICK CROWLEY
The Cincinnati Enquirer
WILDER — In virtually every Northern Kentucky neighborhood, there is at least one vehicle with Ohio plates that actually belongs to a Kentucky resident.
That illegal, but widespread, practice may not end anytime soon, but it could begin to fade if Kentucky's wildly unpopular personal property tax on vehicles is cut next year. That appears likely.
Armed with new tax-cutting powers that voters gave the Kentucky General Assembly in November, a high-profile legislative committee has begun putting together a bill that would cut the personal property tax on vehicles by nearly one-third.
But lawmakers say the hated tax that vehicle owners pay every year when they renew their license tags won't be entirely eliminated, as some voters had hoped.
The reason is that local governments and schools depend on the tax for millions of dollars each year.
“It would be a disaster for us” if the tax were eliminated, said Judge-executive Steve Pendery of Campbell County, which receives more than $400,000 a year from the tax.
“And it would be even worse for the schools.”
Kentucky lawmakers are working on legislation that would cut the tax by 30 percent, which is the portion that goes to the state, said House Majority Caucus Chairman Jim Callahan, D-Wilder.
The other 70 percent comes back to the communities and goes to school districts, cities, health departments, libraries, fire districts and counties, he said.
“The popular thing to do would be to get rid of the whole car tax,” Mr. Callahan said. “But then what are local governments, schools, fire districts and others going to do if they lose that funding?
“We have to be prudent here, not just popular,” he said.
Mr. Callahan is a member of a new subcommittee that is looking at not only the vehicle tax, but overall tax reform for the state.
The panel is stocked with legislative heavy hitters, including most members of the Democratic and Republican leadership as well as the chairmen of the House and Senate budget committees.
It's a near certainty that the committee will come up with a
bill that cuts the tax by 30 percent for two major reasons: The people want it; and voters gave the legislature the power to cut the tax last November.
Under the Kentucky Constitution, all personal property must be taxed. In the November election, voters approved a constitutional amendment that allows lawmakers to exempt personal property — in this case vehicles.
When the Kentucky General Assembly convenes in January for its biannual session, lawmakers are expected to jump at the chance to slice the motor vehicle tax, which Gov. Paul Patton has called “the most hated tax in Kentucky.”
It has driven many motorists to break the law.
More often than not, Northern Kentucky vehicle owners with Ohio plates haven't changed their registration to avoid paying the tax, which is based on the vehicle's trade-in value. The tax on a new or late model car can easily amount to several hundred dollars.
Dodging the tax has become such a problem that Kentucky State Police sometimes check cars with out-of-state tags they suspect are owned by Kentucky residents.
“It's one of the biggest complaints I hear,” said Rep. Tom Kerr, D-Taylor Mill. “People really hate paying that tax.”
But Mr. Kerr fears some legislators will pursue a perceived political advantage of ending, rather than just reducing, the tax.
“I'm sure there will be some people calling for that,” Mr. Kerr said. “But you have to look at what will happen if the tax is eliminated. Some local school districts and governments depend very heavily on that income.”
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 repealed.
Reducing the tax by 30 percent will cost the state about $75 million a year, Mr. Callahan said.
“What needs to happen is that if a change is made, the legislature needs to consider the impact it would have on schools and make sure that school funding is not diminished,” said Fort Thomas Independent School Superintendent Larry Stinson, whose district would lose almost $600,000 a year if the tax were repealed.
“Everybody wants a tax cut,” Mr. Callahan said. “But if you take all this money away on the local level, you'll have to make it up someplace else.”
Bill and his 'boy' hash things over
Sixth-graders' loyalties tested by suspension
Ohio city restricts car-phone users
Police official joins memorial to shooting victim
Slaying suspect called jealous
Therapists OK trash-can mom for trial
Airline exchanges trips for food donations
Freedom Center's plans ambitious
Penguins waddle in, settle down
Right to sue HMOs to be stripped from Ohio bill
Car tag tax may be reduced
Vehicle tax can make or break political careers
East side road plans spur debate
Light-rail study called premature
Lost-baby case points to parents
Museum Center selects new director
Planner says vision for region catching on
Three DUI suspects have 10 priors among them
Workers get pizza instead of president
'Haggadah' book tied to 'Prince of Egypt'
Jimmy Carter faces aging with faith
Job loss, family death, auto accident test Crestview Hills couple
Learn about child safety while skating
Younger Harrelson making up for selfish years
Ban asked on reporters' testimony
Chabot leads drive to put TV cameras in federal courts
Chief given reprimand in 1995 Carlisle report details bad blood
Cleanup accepts tires, trash
Ex-UK player on DUI wreck: 'Scars will last forever'
HMO for low-income loses license
Mother, son sue over searches
Ousted mayor of Williamstown pleads guilty to bank robbery
School to shrink to limit expenses
Scramble for vets home
Sycamore planning new school
TRISTATE DIGEST
