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March 29, 2024 2:46pm

OPINION: Louisville’s tax model needs a revamp, put money back in our pockets and create opportunities

This article originally appeared in the Louisville Courier-Journal on March 23, 2024

Greater Louisville’s elected officials and business leaders have been busy in recent years implementing policies to create a more competitive and business-friendly environment. As many of our peer cities are seeing exorbitant housing prices and costs of doing business, Greater Louisville is seizing this opportunity to market our advantages in affordability, logistics and quality of life. Over the past year, the Kentucky General Assembly lowered the state’s personal income tax by a full percent and is working diligently to meet revenue triggers to further reduce it in the coming years. Plus, they have invested in innovative programs like the Kentucky Product Development Initiative, that are helping to make our state more attractive to corporate investment.

Sarah Davasher-Wisdom, president and CEO, GLI

We are already seeing the pay-off from these programs and other policies. Last year, Greater Louisville Inc. grew our economic development project pipeline by 93%, showing there is rising interest in businesses relocating and expanding to our region. But we cannot stop here. In addition to addressing long-term issues like workforce participation and public safety, we have to finish what we started with tax reform by creating more opportunities for community investment through local tax structures.

Louisville has a unique economy that employs hundreds of thousands of people and welcomes millions more through tourism. Right now, much of the city’s funding comes from taxation on our workers through an occupational tax. If we can change the model—taxing consumption rather than production—not only will we keep more money in Louisvillians pockets, we will also increase our ability to invest in community assets by capturing consumption-based revenue.

Two years ago, GLI took a group of 120 business and elected leaders to Jacksonville, Florida for our annual Greater Louisville Idea Development Expedition. We heard from Jacksonville’s top leaders who attributed much of their success to updated infrastructure and improvement projects funded by small and incremental local taxes. From infrastructure investments to downtown revitalization, local funding for these large-scale projects and a competitive tax code has helped Jacksonville grow at an accelerated rate with more than 100 people moving to the region per day. One of our top takeaways from that trip was that Louisville, and all of Kentucky’s cities, needs more flexibility in creating revenue streams to fund projects and support the needs of their communities.