Insurance Tax Rate and Rental Car fee to be raised, cuts or policy changes proposed to balance budgets moving forward
An alternative proposal has been offered to deal with the $35 million projected deficit in the coming Metro Government budget due to pension obligations, increased health care costs and revenue shortfalls.
To see a visual breakdown of the plan, click here!
It calls for raising the insurance tax rate on all forms of insurance, other than health, in a more conservative manner and raising the car rental fee. It also calls for cuts or policy changes in Metro Government departments and all levels of management.
The insurance tax rate will be increased to 9% for the next two fiscal years, then increase to 10% in the following two years. Auto insurance would be slowly phased in beginning in FY 2021 and increase from 5% to just 6.5% by FY 2023. The rental car tax would increase to generate up to $1 million per year.
The plan estimates these increases would generate as much as $50 million in new revenue within four years.
To balance these increases, there is a call for cuts or policy changes in departments of Metro Government. The administration is being asked to consider some of the following areas to determine potential impact and feasibility:
Hiring freeze for all non-revenue producing positions and non-essential spending
Beginning July, 5% salary cut or furloughs for all employees earning over $90K annually
Cut every Metro Council NDF or Cost Center account by $20K
Increase Metro employee health insurance premiums
Eliminate COLAs for FY 20
Eliminate all take home vehicles (with minimal public safety exemptions)
Move USD 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
The alternative plan calls for asking the Kentucky Attorney General to launch an investigation on insurance red-lining. It asks for an increased effort to lobby the Kentucky General Assembly for additional taxing authority, includes a pledge to revisit insurance rates if additional options become available and includes language that all new insurance premium tax revenue shall be used only for pension cost increases after FY 18.