Louisville Mayor Greg Fischer is continuing his push for the local option sales tax, which would let communities vote on temporary sales tax increases to fund projects.
The Democratic mayor is facing opposition to the plan, but not from where you might expect. Much of the criticism of the effort comes from the political left.
In a 15-minute pitch in Frankfort, Fischer extolled the civic virtues of a sales tax that he says would be used to fund local projects chosen by committee and placed on a ballot before voters.
“We need additional capital sources," the mayor told his audience. "In the case of Louisville, 11 years ago four percent of our general fund was for pensions. Today it’s 15 percent. So it’s like a business, we’ve had an 11 percent increase in our expenses, but we haven’t been able to raise our prices; that is, we haven’t had a tax increase.”
But fellow Louisvillian and fellow Democrat Rep. Jim Wayne cited a study that showed the local option means lower income residents would pay a higher percentage of their income in taxes than wealthier residents.
The legislative scrutiny has begun for Kentucky Governor Steve Beshear's proposed budget.
Some lawmakers are critical of the proposal for relying on professional license fees to balance the budget.
From barbers to doctors, blue and white-collar professionals in Kentucky must pay licensure fees in order to practice their given trade. Those fees then go back into funding and staffing the licensing board.
But Beshear’s budget proposal transfers about $370 million in surplus fees to the General Fund, creating a structural imbalance.
Rep. Jim Wayne calls that robbery.
“It puts the boards and commissions in a position where they have to raise the rates on people who are being regulated by their boards and commissions," the Louisville Democrat said. "So, if they don’t have the money to sustain them because it’s been robbed by the governor, they have to go back and then tax, in essence.”
Wayne says the practice has become so commonplace, it’s become a “new normal.”
Kentucky’s Blue Ribbon Tax Commission has spent months learning how the state’s tax system works, and is now beginning to hammer out proposals to reform the state’s tax code. The commission met again this week in Frankfort to hear some final reports from the Beshear administration on how Kentucky’s current revenue systems work.