Local Democrats Raising Your Taxes Again

Despite the fact that Louisville’s taxes are the 4th highest in the nation, your local officials, both elected and appointed, are on a fast track to raise your taxes again this year. Not only has the Property Valuation Administrator (PVA) drastically increased the taxable valuation of residential property in the city, but now the Metropolitan Sewer District Board (MSD) and the Jefferson County Board of Education (JCPS) are plotting to impose yet another sizeable increase in the tax burden of local residents.

At its meeting yesterday, the JCPS board announced that it may need to seek a 4 percent property tax revenue increase, in order to balance its $1.4 billion budget for the 2015-16 year. We’re already paying in excess of ten grand per year, per student (higher than the national average) for a dismal school system with a horrible graduation rate (lower than the national average).

The level of mismanagement at JCPS is staggering. Jefferson County’s private and parochial schools spend an average of $7,500.00 per pupil, per year, and produce a pretty good educational product. By every measure, students taught in these schools receive higher scores on standardized tests, and a much higher percentage of them graduate from high school and go on to college. But the average ratio of administrators to teachers is 1 staff for every 2 teachers; the exact opposite of the 2:1 ratio at JCPS.

Now, this corrupt and top-heavy (there are 332 JCPS employees who are paid $100,000 a year or more; none of whom actually teach students) organization is crying the blues. They need more money. They need to raise another $24 million just to make ends meet. Why, they will even be forced to pull $10 million from their “emergency fund” piggy bank; leaving them with a mere $93 million in their contingency fund.

Their proposed budget is $1.4 billion. That’s billion, with a “B.”

The district's current tax rate is 71 cents per $100 of assessed value, which means the owner of a $100,000 home currently pays about $710 in property taxes to JCPS. In the past ten years, the JCPS board has raised this rate by 21 percent. Property owners in Jefferson County have seen their school tax rates steadily climb over the last decade.

In 2004-05, the owner of a $100,000 home would have paid the school district $592 in property taxes -- $124 less than what the current rate yields. That equates to a 21 percent increase over the past 10 years. In addition to these outrageous property taxes, JCPS also gets about $26 million in motor vehicle taxes each year, as well as $134 million in occupational taxes deducted from the paychecks of workers in Jefferson County.

To add insult to injury, the MSD board announced yesterday that, for the second year in a row, it wants to increase your rates by 5.5 percent. The average residential rate payer is now being charged about $535 per year for “wastewater charges and drainage fees.” This rate proposal will be presented to Louisville Metro Council on June 18, and is scheduled for final approval by the MSD board on July 27.

The MSD operating budget for the next fiscal year is projected to be $115.5 million, and its capital budget will be $187 million, up from $117 million for the current fiscal year.

Working folks here in Derby City are certainly aware of the fact that they share a tax burden significantly higher than the national average. But a report released by the Office of Revenue Analysis of the Government of Washington, D.C., indicated that Louisville’s combined local tax burden is the fourth highest in the country.

The report reviewed the estimated property, sales, auto and income taxes a family paid in 2011 in the largest city in each state. The differences were stark. A family of three earning $150,000 in Cheyenne, Wyoming, had a tax burden of 3.1%, or $4,702; lower than any other city. In Louisville, Kentucky that same family would have paid $18,008, or 12% of its income. And Louisville working families earning $25,000 to $50,000, actually pay a higher total rate of 14.4%. Again, this is excluding federal taxes.

According to Edward Wyatt, fiscal analyst for the Office of Revenue Analysis, while tax rates are certainly a factor in the tax burden on families, it is more the existence of certain kinds of taxes that determines whether families pay through the nose or barely at all come mid-April. Personal income tax is one of the key factors. Kentucky has a personal income tax, and Metro Louisville has a regressive flat income tax it calls an “Occupational License Fee.” Unlike progressive income taxes, the Occupational License fee percentage does not increase as earnings increase; low-wage earning families pay the same rate as wealthy earners. And there are no deductions or exemptions for family size.

All of this comes on the heels of a heated battle at Louisville’s Metro Council, where Democrats and Republicans were fighting over a proposed tax increase. Seven of the Democrats on the Metro Council went on record in support of a 20% increase in the city’s insurance premium tax. Primary sponsors of the tax increase proposal included Democrat councilmembers Tina Ward-Pugh, Mary Woolridge, Attica Scott, Brent Ackerson, Rick Blackwell, Madonna Flood, and Tom Owen.

The nine Republican members of the council voiced opposition to the plan. The Democrats sought to collect an additional $10 million annually, to be used to construct “affordable housing” for the disadvantaged. The funds would come from taxes levied upon automobile, real estate, healthcare, and general liability insurance premiums. Again, this would add to a regressive flat tax, with no exemptions for family size or earning capacity. “It’s just not well thought through, and I am thinking there is no way in the world I could support this,” said Metro Councilman Kelly Downard, a Republican who represents the Prospect area.

When supporters of the 20% tax increase learned that Kentucky law would not allow the revenue created to be “earmarked” for affordable housing, all but three Metro Councilmen withdrew their support. With only Democrats Ward-Pugh, Scott, and Owen backing the tax, the measure was withdrawn from Council consideration.

At the same time, Democrats at a state and local level—including Mayor Greg Fischer, Governor Steve Beshear, former Lt. Governor Jerry Abramson, and members of the Louisville Metro Council and the Kentucky General Assembly—tried to push through a Local Option Sales Tax amendment to the state constitution. The plan was to allow cities like Louisville to charge an additional 1% local sales tax—on top of the 6% state sales tax already being charged—to help fund a wish list of local projects, such as a bicycle path encircling Jefferson County. Louisville’s only daily newspaper, the Democrat-leaning Courier-Journal, strongly supported these tax increase proposals, and even conducted a push-poll which purportedly showed overwhelming support for the increased sales tax. (Supporters used the acronym “LIFT” in reference to the Local Option Sales Tax initiative; the initials “L.O.S.T.” having been determined to convey an unhelpful message.)

These previous attempts at gouging the taxpayers all failed, after the voters made their displeasure known. The current MSD and JCPS scams will likely slip through without much notice, while Louisvillians are on summer vacation.

Local government around here has many of the features of RICO organizations.

And remember: They’re all Democrats.