Representative Michael Meredith (R-Oakland) introduced on Friday the top legislative priority of the Kentucky League of Cities during the 2022 Regular Session. House Bill 475 would let Kentuckians vote on a constitutional amendment to allow the General Assembly to comprehensively reform local revenue options.
The legislation would not create any new taxes; instead, it allows the General Assembly to consider all options for local government tax reform. The constitutional amendment would remove restrictive language that limits the legislature’s power to comprehensively reform local government tax policies.
Section 181 of the Kentucky Constitution, which dates to 1891, restricts how local governments may collect revenue to fund essential services. It only permits the General Assembly to delegate a few revenue options to local governments including property, occupational, and a few fees and license taxes.
Kentucky’s revenue-limited cities seek modernization of these antiquated funding options and equalization of revenue tools currently only available to some cities based on prior classification.
The House and Senate must pass House Bill 475 with a three-fifths majority in each chamber. Voters would then decide the referendum on the November ballot. If voters agree, legislators could debate and enact bills in the 2023 Regular Session to modernize revenue options for cities and counties.