On Tuesday, lawmakers heard about the need for a constitutional amendment to reform Kentucky’s overly restrictive local tax system, which would make Kentucky cities and counties more competitive when it comes to economic development.
Shelby Williams Somervell, GLI’s Vice President of Government Affairs and Communications, joined with Representative Michael Meredith, representatives from the Kentucky League of Cities, Kentucky Association of Counties, South Western Kentucky Economic Development Council, and Commerce Lexington to testify on the importance of building more competitive local tax structures to support economic growth, promote business development, and attract andretain top talent.
Because of restrictions in Section 181 of Kentucky’s constitution, local revenue options are limited to mainly property, occupational, and a few fee and license taxes. These restrictive options create a system where Kentucky’s cities are reliant on taxing productivity instead of consumption, putting cities at an economic disadvantage when competing with peer markets with more options for local taxes. GLI advocates that legislators take the first step to correct this barrier by passing a constitutional amendment, that Kentucky voters would then vote on in the next election, to allow the General Assembly the opportunity to rethink local taxation.
In addition, GLI’s advocacy staff is working with lawmakers and interest groups from across the state to advocate for comprehensive state tax reform in the upcoming session.