While Louisville Metro Council voted to reject a countywide tax increase on insurance premiums Thursday, residents of Anchorage will still see those rates double in the next fiscal year — as their city council voted to raise such taxes earlier this month.
Anchorage City Attorney John McGarvey said that the city council voted at its March 11 meeting to double the tax rate on most insurance premiums – with the exception of vehicle – from 5 percent to 10 percent next year.
“I would say we did it because we expected Metro Council to do it,” McGarvey told Insider Louisville on Friday.
As Insider reported in February, once Mayor Greg Fischer first proposed tripling the tax rate of insurance premiums, some of the small incorporated cities in Jefferson County were considering matching that increase to keep such tax revenue in house.
For example, if Metro Council had raised the county’s tax rate to 9.5 percent in the ordinance Thursday night — and Anchorage had taken no action on its 5 percent rate — that would have meant that Anchorage’s tax revenue above 5 percent would have gone to Metro Government.
McGarvey said the Anchorage city council only has one meeting per month, “so we raised it and there was no going back.”
Because the deadline for local governments to set their tax rate on insurance premiums with the state was last Friday, that means that Anchorage will not be able to lower its rate from 10 percent until the 2020-2021 fiscal year at the earliest.
McGarvey noted that the increased tax revenue would be useful for Anchorage to deal with its increased pension payments for the city’s roughly 15 employees, as the Kentucky Retirement Systems mandated a 12 percent increase for all local governments — the same impetus behind Mayor Fischer’s plan in the first place.
Reposted from https://insiderlouisville.com/government/metro-council-rejected-tax-hike-but-not-anchorage/