Calling Mayor Greg Fischer’s proposed LG&E franchise fee a “burdensome tax” Greater Louisville Inc. is urging its business members to oppose the idea ahead of a key vote.
The mayor wants a 3 percent fee on natural gas in order to generate a net worth of $4.8 million, which will go towards a more public safety spending.
According to Fischer’s office the gas fee would add about $20 per year to an average household’s bill.
But it cannot be applied to residents living in smaller incorporated cities within Louisville Metro’s borders such as Shively, Prospect and St. Matthews.
As WDRB’s Chris Otts first reported, GLI sent a letter to its members Thursday urging them to contact council members, saying they disagree with imposing a new fee on residents unevenly.
Greater Louisville Inc. is opposed to the proposed three percent (3%) natural gas franchise fee on many Metro Louisville residents and businesses. In essence this is a new $5 million per year tax on Louisville residents and businesses, making worse an already burdensome tax environment. Additionally, GLI has concerns with the implementation of this new franchise fee/tax. As proposed it would be unevenly applied across the community and would unfairly impact only residents and businesses in the Urban Service District and the unincorporated areas of Louisville Metro. Small businesses without the capacity to “wheel in” gas would be the most punitively burdened.
At a minimum GLI believes that consideration of the fee/tax should be separate from the budget process so that the community can voice their comments and the Council will have sufficient time to consider the implications of the additional fee/tax.
Republican Caucus Chairman Kevin Kramer told WFPL last week that his members also plan to contest the mayor’s fee.
“We’ve been consistent in saying we can take care of the budget needs without raising taxes,” he said. “And so adding a new tax at this juncture is going to be a concern for some of us.”
In the letter, GLI adds that policies directed towards improving the city’s economic climate such as lowering the cost to do business would be a better option than raising the LG&E fee.
Just last month, Fischer said the city was taking over the bulk of GLI’s role and ending its $1 million contract with the organization under a new plan dubbed “Louisville Forward.”
This week the embattled chamber of commerce announced a new president and CEO, Kent Oyler, was taking over. Oyler says he and Fischer have a 20 year relationship in business and civic matters.
The ordinance imposing the fee is scheduled to be debated during council’s Budget Committee meeting this evening.
The latest version of the bill authorizes the mayor to renegotiate and execute an agreement with LG&E for up to two years. But it also restricts any city fee on natural gas from exceeding 3 percent of gross receipts.
UPDATE 7:22 p.m.:
After an hour-long debate, the Budget Committee approved Fischer’s LG&E franchise fee by a 4-3 vote largely along party lines.
Republican members peppered administration officials with questions about how the revenue would be spent and if the additional public safety initiatives couldn’t be paid for using revenue growth.
Councilman Kevin Kramer, R-11, says the ordinance is troubling because it gives the mayor authority to negotiate and change a 2-year agreement with the utility company without oversight.
“There’s no need for us to do this right now,” he says.
Other GOP lawmakers, such as Councilwoman Marilyn Parker, cited the hikes in other areas, such as the proposed 5.5 percent sewer cost, as a reason to hold off. She suggested a one percent cut to all other programs besides public safety should be used to pay for Fischer’s new initiatives.
Democrats on the committee tried to avoid the debate for the most part, but one of their members voiced opposition, calling Fischer’s fee a “de facto tax” on residents.
“I represent people who are low-income and on fixed incomes,” says Councilman Brent Ackerson, D-26, who does not sit on the budget panel. “I prefer to call this what it is, which is a tax increase. At the end of the day, my constituents will pay more money.”
Those voting for the mayor’s proposal were Democrats Rick Blackwell, Dan Johnson, Vicki Aubrey Welch and Republican Kelly Downard.
Republicans Kramer, Paker and Jerry Miller voted against the ordinance.
The ordinance heads to the full council next Thursday.