LOUISVILLE, Ky. (WDRB) -- Louisville Mayor Greg Fischer said he wants a 200 percent increase in the city's insurance tax to fill the gap created by the state's pension crisis.
In an exclusive one-on-one interview with WDRB News on Wednesday, Fischer said the city faces a $65 million budget shortfall over the next four years, $50 million of which is due to state mandated increases in pension contributions.
Without the tax hike, Fischer has warned dramatic cuts to services like police and fire. But is the pubic getting the full picture?
Here is the Q&A with Fischer:
Q: "Tell me how you came to these numbers."
A: "You can either cut, which we can talk about separately, or you need revenue. So when we take a look at our revenue options, we ... are very limited in the options we have. And we only have one that can give us the type of numbers we need in the time frame allowed, and that's the insurance premium tax. We take a $65 million number, and we back into that based on different lines of insurance."
Q: "I want to talk about the approach. Do you feel like the public is getting the full picture? Why put forward such a big tax increase without a budget? Why not come forward with a budget proposal with a spending plan?"
A: "Daniel Frocht, our CFO, has talked with the budget committee, and we've done some high-level budget requirement around that. We have costs that are built into the annual budget in terms of our labor contracts for instance inflation, so we know what that's going to be. We also know what we hope is going to increase in terms of increased revenue from property taxes, from occupational taxes. You do that, and we still have a $65 million problem."
Q: "Sure but you've laid out in great detail the potential of closing police divisions and fire houses. [You've laid out in] great detail what the cuts would be. But why wasn't that same detail put into the spending plan? 'This is the money we have, and this is how we would use it.'"
A: "I believe it has been provided, and there's no problem to provide it."
*WDRB News made requests for detailed, forecasted city revenue and expenses for two weeks. After this interview Wednesday, Fischers' spokesperson asked us to delay this report until such information could be provided.*
Q: "What do you say to the people who feel like this is a scare tactic?"
A: "I've had people tell me this is all a joke. This is a ruse. We have a pension bill from the state of Kentucky that is above and beyond anything we've ever paid before ... So I don't understand this problem people are having, saying 'you're trying to scare us by us telling the truth on what will happen if we don't have the money to fund services.'"
Q: "Have you looked at where the city can be more efficient?"
A: "I hope you'll report that of our 19 peer cities. Louisville has the fourth-lowest ratio of city employees to population. That is a tremendous sign of efficiency ... We've been cutting and reorganizing for the last eight years and will continue to do so, but right now, I believe we are cutting into the bone."
Q: "My question was where is the bloat? Where can efficiencies be gained without those cuts to vital services?"
A: "I reject this notion that there is bloat in city services."
Q: "What's next if the council does not pass the tax increase? Are you prepared to take less than the proposal?"
A: "We put something out on the table for people to consider for people to talk about. Now the conversation ensues. I need to listen to our citizens. That's my job."
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