Presenting the Louisville Metro Council and residents with his third budget, Mayor Greg Fischer unveiled a new spending plan which includes additional funding for the city’s roads and infrastructure.
The 2013-14 budget avoids any tax increases, employee layoffs or service cuts due in large part to higher than anticipated revenue and curbs to spending.
Metro Government has a $528 million general fund and has seen significant budget shortfalls in recent years.
In the coming fiscal year officials expect a $3.3 million surplus due to the city’s occupational tax rising by about 3 percent, a 2.5 percent increase in the insurance premium tax and business profit taxes are expected to increase by 6 percent. The Fischer administration was also able to cut expenditures by not replacing retiring employees, reducing overtime pay by $1.5 million and lowering the structural imbalance by $15 million.
But one of the chief items the mayor’s office is bragging about is putting $6.4 million towards paving roads and creating biking lanes. The city has spent on average $2.5 annually on infrastructure since city-county merger, which is well below the needed $8 to 10 million council members request and others argue the Public Works department requires.
Fischer says the city still has a financial imbalance and pension obligations, adding officials will have to watch every dollar. But the mayor believes an improved economy has allowed for his administration to make needed infrastructure improvements.
“There’s been a little bit of relief and we have good control on our expenses with cost reductions as well. And that’s going to allow us to make some investments that we haven’t been able to make in the last couple of years, in particular with some road improvements and more bike lanes,” he says.
The infrastructure spending will create approximately 28 miles for bike lanes mostly in downtown and the Old Louisville neighborhood. But officials says multiple street pavings and sidewalk restoration covering major thoroughfares are planned for the construction season.
Increased funding will come from a combination of road bonds, higher revenue and the mayor’s office is offering to $1.3 million in funding if council members can pool their capitol discretionary funds.
“There’s a lot of un-met need out there that we need to find a way to fund in future budgets. But as the mayor said this budget allows us to begin to address some of our deferred maintenance issues and we’re pleased with that,” says Steve Rowland, the city’s chief financial officer.
The mayor’s new budget also includes half a million dollars more in emergency maintenance, a 2 percent raise for non-union employees and a 21 percent increase to funding for community ministries. Other external agencies such as social service and arts groups will receive funding at continued grant levels.
Budget Committee Chairwoman Marianne Butler, D-15, says she expects the council will make minor changes, but is pleased with the budget’s focus on paving after working behind the scenes with the administration.
“It’s a positive step and it appears Louisville is digging its way out of the recession,” she says. “I think the council will look at external agencies and see if there’s any wiggle room there to help.
Unlike in year’s past, the council did not send Fischer a “wish list” of priorities and instead focused on pushing the administration for more road funding. Last year, approximately $1 million was put in for roads and infrastructure, which some lawmakers called unacceptable.
“The $6.4 million is not enough, and to say it has increased from $2.5 million well $2.5 million is an embarrassment,” says Councilman Kelly Downard, R-16, budget committee vice-chair. “I’m hoping they will continue to improve on it, but I’m not ecstatic either.”
Downard says GOP council members are also concerned with spending priorities regarding bike lanes, and lawmakers from both parties have voiced concerns with the effectiveness of hiring a new position to deal with vacant and abandoned properties.
The Fischer budget doesn’t address any impact from federal sequestration, which has already resulted in many teacher lay offs in Jefferson County Public Schools. Many city programs and employees are federally funded and those potential automatic cuts will be dealt with as they arise.
Payroll costs increased by 10 percent and another major problem is the growing pension costs, which have risen by 135 percent since merger.
“The effects of the sequester are unknown. They might hit us in the neighborhood of $10 million or so, we’ll wait and see what that actually is,” says Fischer.
“On the pension side, obviously our focus there was on getting some type of pension reform. Now we’ve always been having to pay what our amount is into the budget no matter what. And as I said, it’s $75 million right now when the merger first took place it was around $20 million.”
Fischer’s office has also set aside $6.2 million owed to firefighters in their overtime settlement and plans to increase its full payment to the KFC Yum Center debt from the minimum $6.5 million to $9.8 million annually.
The mayor’s spending proposal requires council approval and will be reviewed by city lawmakers in a series of hearings beginning next month.
The new fiscal year begins July 1.