Louisville sues Kentucky state government over legislature’s earmark of local funds
The state budget bill directed Louisville's mineral tax money for a single project -- a move city officials say runs afoul of the state Constitution.
LOUISVILLE, Ky. (WDRB) – Louisville Metro government filed a lawsuit Tuesday claiming state lawmakers unconstitutionally earmarked mineral-tax revenue that should be controlled by local officials.
At issue is a portion of Kentucky’s two-year budget bill that gave a single project – a botanical gardens in the Butchertown neighborhood – Jefferson County’s share of taxes assessed on limestone and other mined minerals.
State law provides “local discretion” of the funds, according to a copy of the lawsuit filed in Franklin Circuit Court and provided by the Jefferson County Attorney’s Office. In 2017, for example, Louisville received $350,000 in mineral-tax revenue and spent it on projects that qualify, such as roads and public safety.
But the suit argues that “the legislature singled out Jefferson County and discriminated against it by attempting to restrict its use of the moneys it receives” and violated the Kentucky Constitution by amending a “law of general application.” No other counties’ mineral taxes were affected by House Bill 200.
In a statement, Mayor Greg Fischer said Louisville has “many pressing needs, and we don’t need Frankfort overriding local control of precious tax dollars.”
“The people of Louisville and their elected leaders know best how to get the maximum return on investments in our city – the economic boom we are seeing is proof of that,” said Fischer, a Democrat. “Singling out our city for this kind of earmark is wrong.”
Metro Council budget chair Bill Hollander, a Democrat who raised concerns about the legislature’s move in April, said he was glad the city is contesting this very bad precedent.”
Both Fischer and Hollander noted that they support the $63 million project, which began with site preparation work last December. The gardens are to be built in three phases as funding becomes available. A visitor center, restaurant and conservatory also are planned, among a sweep of gardens on the 23.5-acre River Road site once home to the Ohio Street landfill.
The bill, approved by the Republican-controlled legislature, did not specify how much revenue would be spent on the project over the next two years.
Named as defendants in the lawsuit are Kentucky Finance and Administration Cabinet, the Kentucky Department for Local Government and Botanica, the developer of Waterfront Botanical Gardens.
A Finance Cabinet spokeswoman declined to comment on Wednesday, saying the agency had not yet seen the lawsuit.
Metro government is asking a judge to rule that the earmark can’t be enforced and allow city officials to spend the mineral taxes as they see fit.
In April, Waterfront Botanical Gardens executive director Kasey Maier said the organization sought state funding for the project but didn’t ask for the mineral-tax revenue. She declined comment on Wednesday.
Legislators in the budget process did not respond to questions or requests for comment about how the money was inserted in the spending plan, WDRB News previously reported.