Metro Council Signs

Thursday night, dozens of city workers and allies held signs urging Metro Council against budget cuts as a budget committee passed a plan that does include substantial cuts, along with a tax hike. (WDRB Photo)

LOUISVILLE, Ky. (WDRB) -- In less than five minutes, the Metro Council Budget Committee made it official: A plan to increase the city's tax on some insurance premiums passed, mostly along party lines, by a vote of 7-4.

Bill Hollander (D-9), Keisha Dorsey (D-3), Barbara Sexton Smith (D-4), Pat Mulvihill (D-10), Rick Blackwell (D-12), Cindi Fowler (D-14), and Markus Winkler (D-17) voted for it. Kevin Kramer (R-11), Paula McCraney (D-7), Scott Reed (R-16) and Marilyn Parker (R-18) voted against it.

What was passed does not mirror what Mayor Greg Fischer proposed weeks ago when he suggested the insurance tax should be tripled. Instead, the council committee opted to pass a more moderate tax hike (doubling the insurance premium rate and increasing a tax on rental cars) proposed by Winkler, a freshman Democrat. While Winkler's proposal does include a tax hike, it also includes millions in cuts.

"This proposal calls for $15 million in cuts immediately and still leaves a $25 million shortfall in [fiscal year 2023]," Winkler said. "That's $40 million in cuts that we'll have to absorb."

In fact, Republicans and other Democrats expressed a desire for even more cuts.

"There are so many other cuts beneath the surface that I wish we would take the time to look at before we vote on a tax increase," McCraney, a fellow freshman Democrat, said before she voted against Winkler's plan.

Brent Ackerson (D-26) also expressed a difference of opinion during a caucus meeting earlier in the afternoon when he released his own plan that would solve the city's pension crisis next year with cuts ("10% across the board cuts for each department, excluding Police, Fire, EMS, Corrections, and Youth Detention") and no tax hike.

"At a minimum, we must do our due diligence and determine precisely what can be cut before resorting to any percentage increase in the Insurance Premium Tax," Ackerson wrote in a memo to his colleagues. "Refraining from a tax increase also gives us time to lobby Frankfort for additional tools to solve these issues in the future."

Hollander and Winkler considered Ackerson's proposal dangerous.

"I think that's unfair to workers. I think it's unfair to our citizens. I think it's unfair to our partners," Hollander said in response. "People want us to act and solve this problem now."

Consequently, Hollander hopes the majority of Democrats will find the courage to support Winkler's plan that balances a tax hike with cuts. If it's to pass, 14 council members will have to say "yes" next Thursday, which isn't a guarantee. In an effort to secure more votes, for instance, Winkler said he removed a controversial tax increase on auto insurance rates from his proposal.

Fischer, meanwhile, gave Winkler's plan a mixed reaction in a statement after the committee vote Thursday evening"

"I understand that the Council feels some cuts are needed, and I am willing to work with them on a reasonable solution; I am always open to ways to make our government more efficient," Mayor Fischer wrote. "Still, Council must be very clear on which cuts they believe are acceptable to fill the shortfall this ordinance creates, and my priority will be to limit the impact to services that help our residents.  Over the course of the next 7 days, I will work tirelessly to urge Council to amend the ordinance to provide more funding for needed services."

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