Louisville Mayor Greg Fischer Pitches Local Option Sales Tax to State Lawmakers

Louisville Mayor Greg Fischer says a sales tax option is fundamentally about residents having the right to vote on paying for local projects.

Fischer joined the Lexington Mayor Jim Gray and county leaders from across the state in the state capitol to discuss the proposal at a General Assembly committee hearing Wednesday.

The specifics of a proposed local option sales tax in Kentucky haven't been revealed, but in general it would allow voters to approve a 1-percent tax increase that would go toward specific efforts such as new infrastructure.

Fischer says cities need a more diversified revenue stream but stressed any tax hike would be temporary.

“It’s outside of the general fund. It’s specific. So if it’s on the ballot it’ll identify the project, how much it costs, the duration of construction and it’s temporary. It’s going to go away,” he said. “Now if people want to vote a new project back in they can do that. But once the specified amount of money is raised this tax sunsets and goes away.

State lawmakers have given mixed reviews while saying they will keep an open mind about the proposal.

Earlier this year, Democratic House Speaker Greg Stumbo and Republican Senate President Robert Stivers opposed Fischer's plan, saying cities already have revenue alternatives.

But Fischer's argument at the local government committee meeting boiled down to investment needs, saying the tool is about improving the city’s quality of life and competing with more attractive cities.

“So that when your child or grandchild comes to you and says, ‘Grandpa, I’m going to Austin. I’m going to Nashville. There’s more going on there.’ And it kills you,” Fischer said. “I think I haven’t done my job as mayor until I eliminate that excuse. And often times they go to these bigger cities because those cities believe in themselves. They believe in themselves enough to let their people vote on whether or not they want to invest in their communities.”

A recent study showed a local option could add $138 million in new revenue for Metro Government. But the report also found Louisville is one of the most heavily taxed cities in the country.

State lawmakers have said they want more information about the proposal, which could be introduced in the 2014 legislative session.

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