Louisville Mayor Greg Fischer to pitch local sales tax proposal - WDRB 41 Louisville News

Louisville Mayor Greg Fischer to pitch local sales tax proposal in Frankfort Thursday

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LOUISVILLE, Ky. (WDRB) -- Louisville Mayor Greg Fischer will attempt to sell Kentucky lawmakers on his local option sales tax proposal today in Frankfort.

Fischer is set to testify at 1 p.m. before the General Assembly's interim joint committee on Appropriations and Revenue.

Fischer's proposal would let local governments, like Louisville Metro, ask voters to approve a temporary increase of up to 1 percentage point in the sales tax to fund a particular public project, or a set of projects, in the community.

A 1 percent sales tax in Louisville would raise about $95 million annually, according to a recent study by Janet Kelly, professor and director of the Urban Studies Institute at the University of Louisville.

The proposal faces an uphill climb in Frankfort. It would require an amendment to the state constitution, which involves approval first by the legislature and then by voters in a statewide referendum.

Thursday's hearing is the second in the last month on the sales tax idea, "evidence that the concept is gaining momentum from small and large city mayors, business leaders, chambers of commerce and economic development agencies statewide," according to Fischer's office.

If the 1 percent local sales tax were implemented, Louisville would have the second highest overall state and local tax burden among 16 competitor cities for a hypothetical family, according to Kelly's study.

That's mainly because Louisville residents pay high local income taxes – the highest of the 16-city group, according to the study. In addition to state income tax above 5 percent, Louisville Metro residents pay 2.2 percent of their wages in local payroll taxes if they work in Jefferson County.

Meanwhile, Louisville residents pay the lowest sales tax (the current 6 percent statewide tax) of the group, and Louisville property taxes are the 6th lowest.

Fischer argues Louisville is at a competitive disadvantage with other cities without the ability to raise funds for local priorities.

Metro Councilman Ken Fleming, who commissioned the U of L study, has said the sales tax should be offset by a reduction in other local taxes, citing Louisville's high overall tax burden.

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