Is Mayor Fischer's Proposed Tax Increase The Answer To Louisville's Budget Woes?
Louisville Mayor Greg Fischer says his proposed tax increase on insurance premiums would fill a looming budget shortfall, but other city leaders and community members are divided on whether the revenue plan would do more harm than good. Officials are looking for ways to offset the rising costs of meeting Louisville’s obligation to a state pension fund.
The proposed tax increase was the topic of discussion on Friday’s In Conversation with Rick Howlett on WFPL. Our guests were:
- Metro Council President David James
- District 18 Councilwoman Marilyn Parker
- University of Kentucky Economics Professor William Hoyt
Fischer said his proposal to address a $65 million shortfall that’s projected in the next four fiscal years in part because of the state’s pension obligation, is the “least painful option” on a short list of choices. His chief financial officer has been defending the proposal, which is supported by some of the Metro Council’s 19-member Democratic majority. The seven-member Republican caucus opposes it. The council has begun hearings on the proposal.
District 18 Republican Council Member Marilyn Parker disagrees with the plan.
She said the city has had time to find other, better solutions and that the tax would hurt businesses in Louisville.
“Every business in Louisville is going to turn around and increase their costs because of the extra costs that they have to pay. We don’t need to tax insurance, which is a necessity for Louisville residents. I think we need to focus on needs versus wants,” Parker said.
But University of Kentucky Economics Professor William Hoyt said Louisville is handicapped when it comes to raising revenue because there is not a local sales tax option that municipalities can use. Hoyt said that prevents the city from tapping a potential big revenue source.
Metro Council President David James, a Democrat, said the future could be bleak if Louisville does not find a new revenue source. James said the proposal could change over time, but the council plans to address the budget’s next four fiscal years — not just its immediate needs.
“We’re going to make this a one time deal," James said. “If we are able to get other revenue from someplace else, then we can come back to the ordinance and cut it back to adjust for that. That’s fine. But we’re not going to do this every year.”
Join us next Friday on In Conversation as we talk about development in west Louisville, including projects in the works near 18th Street and Broadway.