Mayor Carter Hendricks of Hopkinsville, Kentucky is looking to raise the city’s insurance premium tax from 7.5% to 10%.
The increase was proposed to help fund nearly $15 million in capital projects, reported Kentucky New Area. The current insurance premium tax revenue of 7.5% generates about $3.9 million per year—with the tax increase, revenue will increase to $5.2 million, the city projected.
During his budget address, Hendricks asserted that the tax increase will help make the city more competitive and even produce a positive economic impact in the long run.
The city’s 12-member council has to approve the plan before it goes into effect.
Higgins Insurance and Benefits co-owner and insurance agent Malcolm Blane said that if a family currently pays a total of $3,225 under the 7.5% tax for a homeowners and auto insurance policy worth $3,000, the household will have to fork over $3,300 should the 10% tax be approved.
