Mayor Fischer seeks local tax option; citizens ask for state earned income tax credit

07/11/2012 11:48 AM

LOUISVILLE – Louisville residents turned out in numbers to call for a state earned income tax credit and Mayor Greg Fischer asked the group tasked with revamping Kentucky’s tax code to consider a local tax option.

The Blue Ribbon Commission on Tax Reform heard from nearly 40 community leaders, school board members, professors, and concerned citizens from the Louisville area Tuesday night on the need to reform Kentucky’s tax code. The commission is supposed to recommend changes to Kentucky’s tax and revenue system by Thanksgiving.

Louisville Mayor Greg Fischer, asked the group to think about Kentucky’s large cities when they consider their recommendations. “Louisville generates 2.4 billion dollars in tax revenue and only receives 1.2 billion dollars back,” Fischer said.

Mayor Fischer asked the group to consider a mechanism for Kentucky cities to share in sales tax revenue.

“Kentucky should dedicate a portion of the state’s sales tax to be returned to the community that collects that tax,” Fischer said. “Kentucky should also grant cities the option of a small local sales tax to fund local projects.”

Fischer said his proposal for a local option sales tax would require a change to the Commonwealth’s constitution allowing local referendum.

While several other presenters from the Louisville area made their pitch for a local option sales tax, one presenter representing the National Federation for Independent Business called the idea a “nightmare of compliance.”

“Adding individual local sales tax will only add to that compliance nightmare and make it that much more difficult on small business,” Tom Underwood the state director for the NFIB told the group.

This was the group’s third public meeting outside of Frankfort. While the need for more revenue has been asked for in Paducah, Bowling Green and now Louisville several residents also asked for a tax break for the lower earning Kentuckians.

Several asked for that break to come in the form of a state earned income tax credit.

Retiree Gordon Cipher asked the group to consider taxing retirees making more than $100,000 in combined income start paying income tax. “It is representation without taxation,” Cipher said, earning him some laughs from the group.

Cipher said his proposal should not reach retirees getting by on minimal social security or small pensions, just those with more than $100,000 in annual income from all sources.

“There are probably not many folks coming up here asking to be taxed more, but I think probably our class needs to be included in paying taxes more,” Cipher said.

Sarah Lynn Cunningham, an environmental engineer who lost in the Democratic primary to replace state Senator Tim Shuaghnessey, spoke to the group on behalf of the Louisville Climate Action Network.

Cunningham sited tax credits for coal companies versus tax credits for clean energy.

“Coal does generate tax revenues, but we lose much more. The estimate is in 2006 we lost $115 million dollars by way of tax credits over and above what they contributed to the state,” Cunningham. “At minimum the tax code should be neutral. You should not be favoring coal over solar. You should not be favoring coal over energy efficiency.”

Rep. Jim Wayne, D-Louisville, a member of the tax reform commission asked the group’s consultant to look at the competitive status of Kentucky versus other states, something that was brought up several times by citizens.

Wayne also asked the consultant to analyze the coal study mentioned by Cunningham and other speakers.

“It would be interesting to get your analysis of that coal study, because its been out a couple of years and I don’t know that we’ve had a scholar look to see if we could (illegible) some good information there,” Wayne said.

Retiring legislator Rep. Bill Farmer also asked the consultant to study the effects of the Affordable Care Act.

“When we make our decisions as to where we need to be looking at revenue sources and what level of revenue we need to be funding at,” Farmer said. “What we don’t want to be doing is sitting here and having this commission right now coming up with a set of policies that by the time this is fully implemented may be an insufficient revenue stream to cover what we see as future needs.”


Subscribe to email updates.

Subscribe and get the latest political intelligence delivered to your inbox.