Sexton: Lawmakers Looking At Phased Approach To Restore Shared Sales Tax With Cities

House Speaker Cameron Sexton said sharing more state revenue with cities is something the General Assembly could work on in the future.

The state’s new budget does not include funding to restore the historic sharing of state sales tax income with cities. Sexton said lawmakers are looking at adding the funding incrementally.

“On the state shared sales tax, that comes out to the tune of I think $200 million to $300 million and taking a reoccurring hit like that in the state budget is a big hit to take. so we want to be careful,” Sexton said.

Sexton said the state could tackle the issue from a phased approach like they did with the Hall Income Tax. It was a state tax on interest and dividend income. From 2016 to 2020, the state annually reduced the tax by one percent until fully repealed in 2021.

“That was about $400 to $500 million dollars,” Sexton said. “We didn’t cut it all at one time. We cut it over a period of years until we could get it eliminated. This is sort of the same just a little bit of a different approach based on revenue and not a cut of tax.”

Sexton said from his conversations, cities are okay with the incremental approach. Sexton said he would like to see the extra money that could come to local levels be required to be spent on public safety and law enforcement.

The budget also did not include measures to allow local governments to receive their local share of sales tax collected between $1,600 and $3,200 on a single article. Sexton said these issues date back to administrations decades ago.

“There’s two different things. They’re called single articles, and there is state shared sales tax,” Sexton said. “The single articles, they never raised that up for the cities. It’s there for the counties, and then the state shared sales tax, over a certain percentage the state gets all of it. It doesn’t go to the locals. Those are all issues that were brought back when the Democrats were running the state and the budget and they wanted to keep the extra revenue at the state level.”