Louisville leaders steer away from new sustainability tax

LOUISVILLE — Louisville city leaders, like their compatriots across the country, are facing twin crises: climate change and the ongoing COVID-19 pandemic. 

Unfortunately, the latter is hamstringing Louisville City Council’s ability to fully act to address the former. 

City officials and staffers gathered for a special council meeting Tuesday evening to discuss the potential for new sustainability taxes to be put to local voters in November. The consensus from elected leaders was: As local residents and business owners climb out of the COVID-19 hole, now is not the right time for a new tax.

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Monday’s discussion arose out of a 2019 resolution passed by the City Council that expressed the body’s commitment to climate action and established carbon-reduction goals. 

City staff then reached out to Xcel Energy Inc. (NYSE: XEL) to discuss collaboration options.

“In 2020, the city requested details from Xcel on what it would take to get the community

to 100% renewable energy from electricity through a Renewable Energy Credit (REC)

Purchase,” according to a Louisville memo. “Xcel responded that a REC purchase of $650,000 annually would achieve that goal. However, Xcel would not commit to using such funding for the creation of new renewable energy.”

A new tax, potentially one added to monthly utility bills, would be an alternative funding mechanism.

Mayor Ashley Stolzmann said the city wants to “take bold action … but there’s some hesitancy from the council on the funding side.”

Council members agreed that the city ought to take a carbon-reduction leadership role, but said asking voters to approve a new tax before 2022 was unwise. 

New tax proposals are likely “too extreme for our residents right now, but I’m certainly in favor of it in the future,” Councilwoman Deborah Fahey said. 

In addition to more time to recover from the pandemic, city leaders asked staff for greater clarity on what greenhouse gas-reduction projects could be feasible and how much they’d cost. 

Stolzmann directed Louisville staff and members of the city’s sustainability board to develop a menu of programs and corresponding cost estimates, and explore the availability of a variety of different revenue streams to fund those projects.