Next Thursday, March 21st – or more likely in the wee hours of Friday, March 22nd – the Metro Council will vote to increase the insurance premium tax in some way, shape or form, or else the fiscal year 2020 budget beginning July 1, 2019 will include up to $35 million in government services and spending cuts.
One month ago, Mayor Greg Fischer proposed an increase in the city’s tax rates on five types of insurance premiums (not health or auto) from their current 5% to 12.5% in FY20 and FY21, 13.5% in FY22 and 15% in FY23 to entirely resolve the city’s budget gap for the coming year and beyond. Alternatively – if no new tax is passed – Mayor Fischer has offered potential expenditure reductions totaling $35,651,500 for FY20 and increasing to $65,651,500 by FY23.
On February 13th, five of my colleagues sponsored the Mayor’s revenue option in the form of an ordinance. Later that day, I gave you my hot take in this space; and on February 19th, in an interview with the Courier-Journal, I reiterated that “I'm still interested in getting a third option. I think we owe it to taxpayers to see if there is a hybrid that minimizes new taxes on people that can also find cost savings in other places.”
Over the last few weeks, the “hybrid” option appears to have emerged (from Democratic Caucus discussions, at least) as Council Members’ consensus approach on the way forward; the questions we are answering now are: What is the right mix of revenues and expenditure reductions? What expenditure reductions? and What else does the future hold that can be changed?
Last Thursday (3/7), Councilman Markus Winkler (D-17) released another proposal that incorporates some input of other Members (including me). I think Councilman Winkler’s new plan has a lot to recommend it, including the right range of cuts (up to $15 million), restricted use of new incremental revenue to service the pension obligation and the correct identification of several potential immediate-term savings and longer-term sustainability opportunities. I don’t agree with the entire proposal (which is to be expected) – and specifically on the following points – but I think it is a big step in the right direction.
Where I diverge with Markus is on the longevity of the tax increase and in the details of some of the potential reductions. For example, I oppose eliminating ambulances from circulation; I support reducing not eliminating general fund support for The Living Room; and I think bonding $500,000 to leverage more than $1.5 million in federal grants for bicycle infrastructure is a good investment! (Sorry, though, bike lane fans; we are in the extreme minority.)
I favor a two-year plan to make the insurance premium tax increase temporary, get the problem fixed in Frankfort, reduce wasteful spending and reimagine local government. My plan cuts more than $11 million, levies a 3% car rental fee, doubles not triples to 10% the insurance premium tax and resolves the city’s budget gap for FY20 ($36.6M) and FY21 ($44.9M).
It cuts spending in the following areas: Metro Council District Operations and Neighborhood Development Funding; Mayor’s Office personnel; Other Elected personnel; the LMPD Administrative Bureau not Patrol Bureau; overtime; employer health care costs; Economic Development; a public-private partnership for the Belle of Louisville; matching funds for The Living Room; non-local travel, public relations services and office supplies; biweekly recycling and yard waste collection; support to suburban city services; unprofitable golf courses; and personal vehicle stipends.
It also: outsources administration not reduces funding of External Agency grants to Fund for the Arts (Arts, Cultural Assets, and Parks Fund) and Metro United Way (Community Services); limits Tax Increment Financing (TIF) projects and the granting of local incentives pursuant to the Kentucky Business Investment (KBI) Program; appoints advisory groups to establish Louisville Metro Government and Jefferson County Public Schools and Louisville Fire, Emergency Services and Suburban Fire Joint Services Programs; invests in understanding and leveraging Metro-owned real estate and related assets to raise capital; reorganizes Boards & Commissions to facilitate additional fundraising to further governmental purposes; and examines the restoration of the Annual Water Company Dividend from 50% to 60% for FY22 and beyond.
My plan isn’t perfect, either – there’s no such thing – but I think it reflects what I’m hearing from constituents, aligns with our goals and objectives for District 8 and offers my colleagues (at least 13 of them, I hope) another good alternative and thoughtful compromise they can get behind before the clock strikes midnight on Saturday, March 23rd. To be effective for FY20, the Council must approve and the city must file its intent to raise the insurance premium tax by March 22nd.
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A couple quick reminders:
First, especially if you live in the Deer Park neighborhood, don’t miss my next “Town-and-Gown Hall Meeting” tomorrow, March 14th at 6:00pm at Highland Middle School. We’ll introduce new Highland Principal Chris Burba to you, talk about the role of the school in the life of Deer Park and vice versa, JCPS’s Community Schools Program and more with JCPS District 2 Board Member Dr. Chris Kolb, Principal Burba, Deer Park Neighborhood Association President Art Cestaro, parents, teachers and students. Get a sneak preview on my podcast with Principal Burba out today on Eight More Miles!
Second, online voting for Our Money, Our Voice – the District 8 Participatory Budgeting Project – closes this week! The deadline to sign up with Mobileserve in order to request a voter access code is tomorrow, March 14th at 11:59pm and the deadline to submit your online ballot is Friday, March 15th at 11:59pm. As of this writing, more than 300 votes have been cast, including nearly 100 online. So, open a new tab and make your voice heard before it is too late. If you already signed up but haven’t received your voter access code yet, contact Andy Fenton at: (502) 383-1342 or firstname.lastname@example.org – we’ll announce the winning project(s) next week.
For breaking news and information, please follow me on Facebook, Twitter and Instagram. If you have a question or comment, please call me at: (502) 574-1108 or email: email@example.com (and copy firstname.lastname@example.org). If you have a service request, please call MetroCall at: 311 or visit MetroCall 311 online. Visit the District 8 Strategic Plan page here.