Tax reform will help Louisville create investment opportunities

Tax reform will help Louisville create investment opportunities

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 face 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. Last year, the Kentucky General Assembly cut the state’s personal income tax by a full percentage point and is working hard to meet revenue triggers to lower it further in future years. In addition, they have invested in innovative programs like the Kentucky Product Development Initiative that help make our state more attractive to corporate investment.

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We are already seeing the payoff from these programs and other policies. Last year, Greater Louisville Inc. increased our pipeline of economic development projects by 93%, indicating that there is growing interest in businesses relocating and expanding to our region. But we can’t stop there. In addition to addressing long-term issues like workforce participation and public safety, we must 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. Currently, much of the city’s funding comes from taxing our workers through an occupational tax. If we can change the model—taxing consumption, not production—we will not only keep more money in the pockets of Louisville residents, but also increase our ability to invest in community assets by capturing consumption-based revenue.

What can Louisville learn from other cities to improve tax laws?

Two years ago, GLI took a group of 120 business people and elected leaders to Jacksonville, Florida, for our annual Idea Development Expedition for Greater Louisville. We heard from Jacksonville’s top leaders who credited 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 have helped Jacksonville grow at an accelerated pace with more than 100 people moving to the region per day. One of our best takeaways from this trip was that Louisville and all cities in Kentucky need more flexibility in creating revenue streams to fund projects and support the needs of their communities.

Will Louisville’s tax reform help? Submit your letter to the editor here.

Currently, the Kentucky Constitution limits the General Assembly’s ability to update revenue-raising options at the county and municipal level. Professional taxes remain the primary revenue generator in Greater Louisville. While the passage of state tax reform in 2022 highlights the shift from production-based taxes to consumption-based taxes, our local governments are not reaping the same benefits.

GLI has prioritized local tax reform for many years. However, there has never been a more important time to make it a reality. If we are serious about making Louisville and all of Kentucky an economic powerhouse, we cannot afford to kick the can on local tax reform for another year or two. Businesses are eager to invest in our region, so the time to build a competitive tax structure is now.

A few weeks ago, Congressman Jonathan Dixon introduced Kentucky House Bill 14, which would create a voter referendum in November and, if approved by a majority of Kentuckians, would amend Section 181 of the state Constitution to allow the General Assembly to create parameters in which A county, city, town or municipality could review and revise tax structures. We strongly encourage the General Assembly to pass this measure and give Kentuckians the freedom and tools needed to create new local investment opportunities.

Konrad Daniels is president of HJI Supply Chain Solutions and chairman of the board of directors of Greater Louisville Inc. Sarah Davascher-Wisdom is president and CEO of Greater Louisville Inc.

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