Kentucky League of Cities officials outlined the organization’s 2023 Legislative Agenda to members of the Interim Joint Committee on Local Government on Tuesday morning. KLC leadership told legislators that city officials need tools to diversify local revenue, improve communities, and continue growth and development.
More than half of Kentucky’s population lives in a city, four out of five jobs in Kentucky are in cities, and about 75% of all economic activity in the commonwealth occurs in a city. KLC Executive Director|CEO James D. Chaney stressed that the KLC Board of Directors established an agenda to make Kentucky more competitive and less dependent on the current method of taxing people’s paychecks and property.
Ultimately, Chaney said, the board is advocating for policies and procedures that allow people in a community to decide what is best for their city. “Everything that guides our board’s decisions always comes back to that fundamental belief that local decisions are best made at the local level,” he testified.
KLC President and Southgate Mayor Jim Hamberg explained the League’s top priority for the 2023 session is modernizing an antiquated section of the Kentucky Constitution. A referendum in the 2023 election would allow voters to remove language that forces cities to fund everything from police and fire to parks and community venues primarily through property and productivity-based taxes ‒ money taken from businesses and paychecks.
“Diversifying the local tax base allows tourists and visitors to share the cost, reducing the burden on folks currently shouldering the entire cost,” Hamberg explained. He clarified that amending the constitution to remove the outdated language would not raise taxes nor give cities any new taxing authority. “Nothing would be automatic, and local governments would not be able to implement any new taxes on their own,” he said. “That would still require additional legislative action.”
Hamberg also discussed the need to modernize Kentucky’s funding mechanism for streets and bridges. “Quality and availability of city roads are essential for economic development and play a key role in the livability of a community,” he stated.
An agreement with counties would hold them harmless and would only provide an amended funding formula for motor fuels tax revenues above the previous high mark of $825 million. Motor fuels taxes are the only portion of the Road Fund currently shared with local governments, and the state divides it largely through a 1948 formula.
Hamberg and KLC First Vice President and Auburn Mayor Mike Hughes discussed other key issues from economic development and substance abuse to pensions and public safety. Hughes told legislators a common theme exists: equality among cities. “Our members are seeking to level the playing field for all municipalities,” he said.
Access and download the 2023 Legislative Agenda here.