LOUISVILLE, KY (WAVE) - Successes in economic development may soon be impacted by the costs of Kentucky’s public pension crisis, not only at the state level, but in the city of Louisville.
Mayor Greg Fischer reflected on the year and discussed the challenges that may confront the Metro area in his annual State of the City address Thursday.
He described a booming economy, with 80,000 new private sector jobs and 2,700 new businesses added since 2014, but said cuts and new taxes may still be needed to fill the gap caused by the portion of public pension liability Metro government must pay.
Metro Councilman Bill Hollander, who serves as Chair of the Budget Committee, said over five years, the $620 Million General Fund will have to make room for $50 million worth of new pension costs, at a rate of $10 million additional dollars a year.
Addressing the Rotary Club at the Ali Center, the Mayor compared the city to Muhammad Ali on the boxer’s birthday, adding that like Ali, it is one of the greatest cities, but faces some big challenges.
"The state of the city is strong," Fischer said, near the start of his speech.
It's a statement Louisville Mayor Greg Fischer backed up with economic development numbers he said prove that point.
At the same time, it's a lack of money that may soon have Metro council members looking for solutions like tax increases or service cuts.
Blaming the state legislature, Metro Council President David James said the pension crisis has yet to be solved and is forcing the city to look at its options.
"Are we prepared to lose police officers and firefighters because of what Frankfort has done?" James said.
Possible cuts suggested by Fischer, were laid out during the speech. City officials said those would require public and metro council input.
Among the early possibilities that could be used to shave the budget are a decrease of 120 police officers, ten percent of the force, EMS equipment, and things like fewer library hours and the closure of parks.
"We've been working really hard to try to reduce the number of homicides shootings and acts of violence," James said. "We were making some headway on that."
James said he doesn’t want to compromise that and the public will get to voice its concerns.
Councilman Bill Hollander said the city has already decreased its general staff through attrition, due to budget constraints. He added that some others on the police force have said their pay isn't competitive any longer.
So, all have emphasized discussion with the community is needed.
City officials said that's true when comes to taxes too.
The mayor said those could possibly include special district and property tax hikes.
Fischer said it’s also frustrating that state legislators are focusing on structural changes to the pension system rather than funding.
Fischer also discussed how homelessness effects the community touting new low barrier shelters. He discussed initiatives to address hate in the are and called for better hate crime laws and gun measures.
He added that, while the economy is booming, opportunities for growth haven’t been tapped out. He said he’d like to seen an increase in the size of Ali Festival.