Mayor Greg Fischer says Louisville’s economy is rebounding from the national recession, but the city still faces a large budget shortfall due to rising pension costs.
Fischer made the comments at his annual State of the City address before the Rotary Club at the Kentucky Center for African-American Heritage. This year’s speech was slightly more upbeat than previous ones, with the mayor arguing that Louisville is becoming more entrepreneurial.
The Metro area has added 22,000 jobs and unemployment has dropped by almost four percent in the last two years. But challenges remain, namely Metro Government’s hefty budget deficits.
“Last year’s $25 million gap is now down to about $13-14 million out of a $500 million general fund. That’s still a lot of money. But we didn’t get into this problem in two years and we can’t solve it in two years,” says Fischer.
“So please, talk to your state Senator and state Representatives and give them the courage to have some fundamental reform of our pension problem.”
About 15 percent of the city budget is spent on pensions for public employees. It was less than half that a decade ago.
Fischer also used the speech to cheerlead support for a local option sales tax be part giving the city a new revenue stream to fund special projects. The idea has been backed Greater Louisville Inc. and Lexington Mayor Jim Gray, and most recently Gov. Steve Beshear endorsed the proposal.
Under the plan, voters would be able to decide on increasing the state’s six percent sales tax by as much as one percentage point. The Fischer administration says this could generate approximately $90 million for things such as roads and sidewalks, parks system, public transportation or other infrastructure projects.
“This is the highest level of democracy, where people—not politicians—decide whether or not they want to invest in their cities. It’s about freedom to choose how you want to invest in your community rather than going to Frankfort and begging for money,” says Fischer.
Some have pointed out that Louisville is already a heavily tax burdened city, such as Councilman Ken Fleming, R-7, who says Fischer should looking at cutting other taxes first to encourage job growth.
A report by the chief financial officer of Washington, D.C., show Louisville is the fifth highest tax burdened city in the county, but the mayor dismissed that study after the address and said the city ranks as one of the lowest taxed among cities with a population over 200,000.
Among other things that the mayor highlighted during his address were:
, a data-driven management system, which has reduced unscheduled overtime costs by about 18 percent and saved 9,000 “lost time” hours – and about $125,000 in related costs – by instituting a pilot light duty program for injured Public Works employees. “Those are direct savings to all citizens who pay taxes to support city government,” Fischer said.
Innovative approaches to economic development, including identifying the most needed skills in Louisville’s workforce, then creating programs to fill those gaps. He cited the training of computer coders last year and the creation of a retail sales institute as evidence of city government responding to demands of the local market. The city also has assembled nearly 30 acres of land in Western Louisville to market and attract good-paying jobs.
Local Investments for Transformation, or LIFT, a local option sales tax for city government. The Fischer administration has made LIFT a priority in the upcoming state legislative session. “This is the highest level of democracy – people, not politicians, deciding whether to raise revenue,” Fischer said. “It’s about freedom to choose how you want to invest in your community.”
Planning for the future with the 25-year Vision Louisville initiative for the built environment and the creation of a Metro Government strategic plan that sets goals for everything from tree plantings to crime reduction to city government services online. One major goal is to divert 90 percent of waste from landfills within 30 years, and, as a step toward that, increase recycling by 25 percent in 3 years. Citizens can view the city’s strategic plan at louisvilleky.gov.