LOUISVILLE, Ky (WDRB) -- Metro Council now has a third option to solve the city's pension crisis. On Thursday, it was described as the lesser of three evils.
"I think this represents the least bad outcome of those possible options," Councilman Markus Winkler (D-17) said as he unveiled a new plan drawn up by some members of the Democratic Caucus. "Most people feel there's some balance between cuts and revenue that's needed."
For weeks, Mayor Greg Fischer has presented two options to tackle the city's pension obligations, increased health care costs, and revenue shortfalls: deep cuts to city services like public safety or tripling the tax on some insurance premiums.
According to Winkler, the new third option does a bit of both: cuts that won't cripple the city combined with a more conservative tax hike that would be distributed more equally.
"Hopefully this provides an anchor that we can talk from and find a solution from," Winkler said.
Over the course of four years, the plan would double the insurance tax and slightly increase the tax on auto insurance too. It would impose a tax hike on rental cars.
"The insurance tax rate will be increased to 9 percent for the next two fiscal years then increase to 10 percent in the following two years. Auto insurance would be slowly phased in beginning in FY 2021 and increase from 5 percent to just 6.5 percent by FY 2023.
"The rental car tax would increase to generate up to $1 million per year," a caucus spokesman wrote in a news release. "The plan estimates these increases would generate as much as $50 million in new revenue within four years."
The plan would also seek out $15 million in cuts.
"People say, 'Cut, cut, cut.' But when you get into the specifics, and you say, 'Well, I don't consume any service from government except for I do drive on roads, and I do want a 911 operator to answer the phone, and I do like my parks mowed, and I do like going to the library ... and on and on and on, that's where it becomes very challenging," Winkler said.
Councilman David Yates (D-25) has been appointed chairman of a new ad-hoc committee tasked with finding some of those cuts.
"I'm OK with being the bad guy, because no matter what we do, people are going to feel this," Yates said.
According to the Democratic Caucus, some of the possible cuts include:
- Hiring freeze for all non-revenue producing positions and non-essential spending
- Beginning July, 5 percent salary cut or furloughs for all employees earning over $90,000 annually
- Cut every Metro Council [Neighborhood Development Fund] or Cost Center account by $20,000
- Increase Metro employee health insurance premiums
- Eliminate COLAs for FY 20
- Eliminate all take home vehicles (with minimal public safety exemptions)
- Move [Urban Services District] to alternating weekly yard waste and recycling
- No yard waste collection in winter
- Move the Belle of Louisville to private funding
- Return Youth Detention Services responsibility to the Commonwealth of Kentucky
- Eliminate funding for the Living Room
- Eliminate capital budget spending on bike lanes for at least two years
- Reduce budgets in every department, focusing on management and communications positions
- Eliminate suburban street sweeping
- Reduce EMS service by one ambulance in areas where suburban districts provide service
- Reduce/eliminate Council designated funds
Related Stories:
- Q&A | Mayor Fischer explains need for tax hike to fill $65 million budget gap
- Louisville mayor proposes tripling tax on insurance premiums to close budget gap
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