LOUISVILLE, Ky. (WDRB) – While Louisville Mayor Greg Fischer is painting a "doom and gloom" picture about an upcoming budget shortfall, some members of Metro Council believe Fischer is using scare tactics.
Last week, Fischer, a Democrat, warned that Metro government may need to lay off public workers, stop services, and make other moves to handle state-ordered increases in public pension costs.
However, some Metro Council republicans are questioning Fischer’s motives in announcing that cuts would take place without a tax increase.
“We knew last year that the pension was going to go up 12 percent this year, 12 percent next year,” Councilman Kevin Kramer said in an interview Sunday. “It didn't come as a huge shock to anyone.”
Due to state mandated changes to pension cost calculations, Metro Louisville’s pension obligation is expected to climb by 12 percent each year through the fiscal year ending in June 2023. It amounts to about $10 million a year.
Kramer, chair of the Republican caucus, believes the budget shortfall is not all because of rising pension costs.
“When you sit down and look at it, and start asking harder questions, one has to wonder why it is so necessary that we automatically have to jump to the conclusion that we have to raise taxes,” he said.
Part of the shortfall comes from an increase of about $15 million in costs associated with Metro government employee’s healthcare cost. Kramer says part of the deficit could be offset by shifting that cost onto city employees.
“None of us want our health insurance to go up but it typically does,” Kramer said.
Council member Brent Ackerson told WDRB News in January that one option under consideration was raising the city's tax on insurance premiums, from five to 10 percent.
Fischer suggested that without additional funding, belt-tightening measures could include eliminating the ShotSpotter gunshot detection technology; closing two of the city’s 21 fire stations; shutting down four of the five public pools; closing four public golf courses; ceasing operations of the Belle of Louisville; partially privatizing the Louisville Zoo; and cutting the number police officers LMPD employs.
"This list of cuts is long, and the impact would be devastating," Fischer said. "But we’re required to balance our budget, and without a major source of new revenue, this is what it will take to fill the gap created by the Frankfort-mandated pension obligation."
Kramer believes that the budget can be adjusted to avoid layoffs and a tax hike.
“I absolutely think there's somewhere in the middle between raising the insurance tax premium five percent or lay off 300 employees,” Kramer said. “I feel very strongly that if we look at the budget we'll find opportunities in the budget to save, where we won't have to raise taxes.”
The mayor’s office does not present a budget for next fiscal year until April.
Fischer’s team also said it expects to officially present a plan to avoid the cuts sometime this week.
- City workers could be laid off to counteract state pension costs, Mayor Fischer says
- Emergency services could face serious cuts due to city's budget shortfall
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