Louisville Metro Council President Jim King says it isn’t practical to raise taxes for the Affordable Housing Trust Fund, despite Mayor Greg Fischer’s suggestion.
The council set up the trust fund to give grants and loans for affordable housing activities, such as new construction, home rehabilitation, payment assistance and emergency repair. But the fund has struggled to find an adequate revenue stream since it was first formed in 2008.
After months of saying that residents had no appetite for higher taxes, Fischer told The Courier-Journal his administration supports a one percent increase of the insurance premium tax to pay for the trust fund if council members agreed.
But King says raising taxes of any kind would be a burdensome to residents and small businesses in a tough economy.
“I would have to say that I didn’t expect (Fischer’s) comment because I wasn’t aware he was interested in adding anything to that tax. But I don’t think that the council as a whole is in a position to support that right now,” he says.
Housing advocates have proposed the one percent increase, and argue that Fischer should take the lead on raising revenue for the trust fund.
A report showed approximately 92,000 families cannot afford their rent or mortgage, and that home ownership has dropped to a five-year low in the city. Activists estimate that raising the insurance tax could add $10 million in new revenue, but city lawmakers would likely want spend that money filling the city’s budget shortfall instead.
“The fact that we’d have a new revenue stream coming in there are going to be many different constituencies who are going to be interested in taking a share of that,” says King.
Fischer has said that paying for the trust fund could be part of the budget negotiations. City officials have said Metro Government has a built-in budget gap of around $20 million annually.