JEFFERSONTOWN, Ky. (WDRB) -- Some suburban cities in Jefferson County could consider a rebate for citizens to offset costs of a tax hike proposal by Louisville Mayor Greg Fischer.
In Jeffersontown, Mayor Bill Dieruf said he began preparing for an increase to the city’s pension obligation in 2016.
“We realized three years ago that there was an effect of 12 (percent) over a four-year period to get up to the point where it’s going to be in future years,” Dieruf said Thursday.
Local contributions are set to increase this coming fiscal year for all local municipalities that pay into the state’s struggling pension system by 12 percent each year for the next four. On Wednesday, Fischer announced a plan to triple taxes on insurance premiums to cover the budget shortfall created by the increased obligation to the state.
"There are no easy or painless or abstract cuts to make and certainly not enough to erase a $65 million deficit," Fischer said. "All of us up here wish this weren't necessary, but it absolutely is."
Eighty-three small incorporated cities inside Jefferson County are likely to match the 5 percent to 15 percent increase as well. If they do not, Metro Government would collect the difference.
“I would not be fiscally responsible if I did not continue to take the funds that are allotted or that I have a chance to get,” Douglass Hills Mayor Bonnie Jung said.
Though some of those cities say they tax increase isn’t needed for them to cover the increased cost of pensions.
“We set aside funds for that,” Dieruf said. “We budgeted funds. We put money aside for the rainy day fund. So when the funding was requested, it was there to be allotted at a later date.”
Last week, Fischer painted a doom and gloom portrait of services in Louisville if the tax increase wasn’t instituted. He warned that without some source of new revenue, things like police, fire and EMS would face cuts.
Dieruf, who is also the president of the Kentucky League of Cities, said he received no communication from Fischer’s office about the potential tax increase and doesn’t like the idea of Jeffersontown residents having their tax rate tripled.
“Each one of them are going to be hit with a bill that is three times of what they pay right now,” Dieruf said. “If you’re looking to move a business to this area, and you see that government is increasing taxes three times of what they pay right now, you may not want to go there.”
As result, some cities are considering ways to offset the cost to residents.
“We may also look at the possibility of some kind of rebate back to our residents. Because we’ve been frugal, because we’ve spent wisely, we may take the money and have some kind of zero effect on our residents,” Dieruf said.
Jung echoed the same idea but also said the extra money could be used elsewhere.
“That means two to five more roads I can do,” she said. “That will mean more infrastructure I can take care of.”
Copyright 2019 WDRB Media. All Rights Reserved.
