The city has bills to pay but doesn’t yet have the tax money to pay them, since the federal tax deadline was delayed to July 15, and some property tax collections could also be delayed.
Louisville traditionally uses both of those pots of money to pay its bills, said Councilman Bill Hollander, D-9, the budget committee chairman.
“This is really just a cash flow issue," he said.
So in the meeting, the committee signed off on a safety net, a $240 million dollar loan, or line of credit, that the city could use to pay its bills while it waits for taxes to come in.
Louisville Chief Financial Officer Daniel Frockt said, “We’d rather have it and not use it than need it and not have it."
But, that money doesn’t solve the long term problem the city now faces: Hollander said the pandemic-induced job losses will lower the city's tax revenue.
“Money we just won’t get in the way of employee withholdings ... because people aren’t employed," he said.
The uncertainty leaves the council and Mayor Greg Fischer with a tricky budget to craft in the next few months.
Councilman Anthony Piagenti, R-19, warned the city likely will face some tough decisions.
“It will be a miracle if we don’t have to do major cuts to various areas of the budget," he said.
That’s why Hollander is asking his constituents to call federal officials and ask them to aid local governments.
“We need Washington’s help now," he said.
U.S. Rep. John Yarmuth, D-KY, saidand and other lawmakers have tried to help.
“House and Senate Democrats have been working to include $150 billion in relief to cities and states to help stabilize their budgets, as well $100 billion more in much-needed funding for hospitals on the front lines of this battle," Rep. Yarmuth wrote in a statement. "Unfortunately, (U.S. Sen.) Mitch McConnell and Senate Republicans voted to block the most recent offer, instead only focusing on adding a level of funding to Small Business programs that Democrats already agree is needed.
"Everyone is hurting right now," Yarmuth wrote. "We need to do all we can to make sure our state and local governments remain afloat as we weather this storm. I hope Senate Republicans will end this stalemate and agree to this vital funding.”
Meanwhile, a spokesman for McConnell, a Kentucky Republican, said the Treasury Department is expected to announce funding soon to help state and local governments.
"Senator McConnell’s CARES Act included relief for state and local governments to help respond to the coronavirus pandemic, and Kentucky is expected to receive at least $1.25 Billion," Robert Steurer wrote. "Because of its large population, the Louisville Metro Government will also receive a share of this funding directly from the federal government."
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