Tax increase vs. budget cuts: Council members speak out

As deadline approaches, Metro council members talk budget cuts, tax proposal

LOUISVILLE, KY (WAVE) - The countdown is on as council members try to decide what to do about Louisville’s budget crisis.

Mayor Greg Fischer is pushing for increased taxes to help solve the problem the city’s $65 million budget shortfall.

District 1 Councilwoman Jessica Green said the tax hike would be especially detrimental to people living past 9th Street. Metro Council President and District 6 Councilman David James said the city has an invoice to pay, and that they can pay it with a combination of budget cuts and tax increases.

But, council members said, as it stands, the city’s plan to increase insurance taxes (on everything except auto and health insurance), needs some changes.

“There is no way in the world I would ever vote for the current plan as written,” Green said. “I’ve been very, very clear about that.”

Green said Fischer and his administration have refused to accept a combination of budget cuts and increases to fix Louisville’s budget loss.

“If someone ever says there is no fat meat or waste in the government, they’re either extremely naive or lying to the people,” said Green.

Fischer said tax hikes are the only option because budget cuts would hinder the services Louisville residents rely on.

“My team and I have managed difficult budget challenges these past eight years without having to ask for a tax increase,” Fischer said. “But this mandate from the Kentucky Retirement System is out of our control.”

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“I’ve been very offended when people say, ‘Well, it only amounts to an extra $15, or an extra $50,’...that is a very elitist stand point,” said Green. “To the people I represent, $15, $30, $50 makes a heck of a difference when you’re trying to juggle money to pay for food or buy medication so you can stay alive. “

Green said people on the west side of Louisville could end up paying more in car insurance that the east end with tax hikes.

But James said that provision only applied to vehicle insurance, and has been taken off the table.

James said to pay off the $65 million, pain from budget cuts will be felt everywhere. He supports a combination of spending cuts and tax increases.

“We have to find a way to make sure we can serve all of our citizens and serve the east side, west side, north side and south side,” James said.

Green said the mayor is using fear to push for tax hikes with his commercials and visits to community centers like Berrytown.

“We’re also looking at closing four of our 17 community centers. So, you have a wonderful community center here at Berrytown,” Fischer said recently during a speech at the center.

James said the insurance tax is the only one that can move the city in the right direction. Budget cuts alone won’t get the job done.

“When you talk about $65 million in cuts, it’s an extremely painful process in our community and it services, and it would set our city back,” James said.

James said the city will have this invoice for the foreseeable future--the $65 million shortfall comes from increases to the city’s payouts to the state pension program and healthcare plans. Every year, payouts to the Kentucky Retirement System, which manages Kentucky’s state pension plan, increases by 12 percent until it levels off in 2023.

Green said the mayor’s plan wasn’t released to the public until about two weeks ago. There’s a countdown to fix the budget issue, with only 18 days left to make a decision.

Out of the phone calls Green has received at her office, 80 percent of the people are against the tax hike, she said.

The mayor has said the city’s budget is already lean and that a tax hike is reasonable.

The council will have to decide on a plan by March 21 for anything to take effect by the next fiscal year on July 1.

There is a budget talk in West Louisville Wednesday, March 6 at 6 p.m.

Members of the public can also speak to the budget committee and council on Monday at 6 p.m. to share your opinions, but they have to sign up at least an hour before the meeting.

The committee has also created an online form for questions about these issues. Answers will be coordinated by the Louisville Metro Office of Management and Budget. Questions can be submitted by clicking here. All questions should be submitted by March 6.

To access general information, and questions and answers on the pension contributions, possible reductions in Metro services and the proposed insurance premium tax, click here.

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