LOUISVILLE, KY (WAVE) - Mayor Greg Fischer said the state pension crisis could force him to lay off 317 government employees while slashing $65 million from the city budget.
Every agency of Metro Government would be affected by the cuts, which would begin in 2019 and run through 2023.
Fischer said he wants to be sure “the community understands the severity of the situation."
“This list of cuts is long, and the impact would be devastating. But we’re required to balance our budget, and without a major source of new revenue, this is what it will take to fill the gap created by the Frankfort-mandated pension obligation,” Mayor Fischer said in a statement.
But some Metro Council members are raising questions about the timing of this announcement -- saying more should have been done earlier to address the problem before resorting to “scare tactics.”
The proposed cuts are big.
The budget for public safety has proposed cuts that add up to almost $16 million for 2019. They include the elimination of two LMPD academy classes, which would eventually lead to 100 more officers on the streets.
The cuts will also eliminate two of the metro’s 21 fire stations. Closing two fire stations starting July 1 is a blow Brian O’Neil said the urban fire district can’t handle.
“You’re going to see more fires that we can’t get to as quickly and we can’t get fully staffed groups there in the time of the NFBA, the national standard, is,” O’Neil said. “The city would lose its accreditation as an accredited fire department.”
O’Neil said the district has lost 90 positions over the past 20 years, but calls are up 300 percent. He said 30 firefighters could make the difference between life and death.
Response rates would drop, which would also mean insurance rates go up.
“If you live in a neighborhood with one of those fire stations, you don’t have it anymore, which means it’s going to be the next station from some other neighborhood that’s going to have to get over there,” O’Neil said. “Now that neighborhood is left unprotected and it spirals out from there as you try to cover those dead zones.”
O’Neil stresses that response time is crucial for firefighters, no matter what situation. It’s not just fires the department handles. They also provide rescue services and medical attention.
Also on the chopping block: The city’s Shotspotter service, which automatically notifies police gunfire is detected in certain neighborhoods.
The budget also details millions of dollars in cuts to parks, libraries, and Metro Animal Services.
The cuts would make the Louisville Zoo independently operated, eliminate all Neighborhood Development Funds allocated by Metro Council and would eliminate all funding for Brightside and the Center for Neighborhoods. The Belle of Louisville would stop operating.
Four of the the city’s 17 community centers would shut down (to be selected from Baxter, Berrytown, Douglass, Metro Arts Community Center, Newburg, Shelby Park, Shawnee Arts Center and the Wilderness Road Senior Center). Four of five city pools would close, as would four of the city’s 10 golf courses.
There are eight pension systems in Kentucky, all separate. Louisville’s is in relatively strong shape financially, city CFO Daniel Frockt said. But the state mandates what the city must pay in.
Each year through 2023, Louisville’s pension obligation--what it must pay out--is expected to increase by 12 percent. In 2019, that amounts to $86 million, up from $77 million in 2018.
By 2023, the payout would grow to $136 million--an increase of $59 million compared to 2018.
The increases for 2030 are especially difficult, Frockt said, because the city also faces a $15 million gap from increased healthcare costs, lower-than-projected revenues in the current fiscal year and a structural deficit created in 2019.
Fischer said in the coming days, he plans to announce a proposed resolution that would avoid the cuts.
On Thursday night, the mayor released a video to social media addressing the proposed changes. (Story continues after video.)
Fischer says in his video that discussions about the issue have been going on for a year.
“My team and I have been working with council members to ensure they understand this difficult situation and they need to make bold moves,” Fischer said.
Councilman Brent Ackerson calls that a total misrepresentation.
“We’ve known there’s a pension problem for years, but only within the last week or so have the numbers been put on paper and put it in front of us to show us how bad things are,” Ackerson said.
Ackerson said these numbers should have come out in April so departments he says could actually afford cuts could have been considered. He added that it would have given the community time to give input on what cuts to make.
Now, the alternative is six weeks to decide whether to cut vital public safety positions or implement a five-percent tax increase.
“How much can people in this town be taxed?” Ackerson asked. “Wages aren’t going up, energy bills are going up there and MSD rates are going to dramatically go up, and then we’re going to dramatically raise their insurance tax?”
Ackerson said MSD is preparing for a massive 20 percent rate increase to deal with the poor condition of the city’s infrastructure. So, the Democratic councilman supports cuts being made, but says there are so many other places to pull from that wouldn’t do as much damage.
“I think what’s been announced today is a political scare tactic,” Ackerson said. “It’s draconian and it’s not equitable in any manner. They picked some of the things that become the scariest. This is one more reason why we should’ve been talking about this back in April, so we could have more time than six weeks to decide what to cut or potentially implement a tax.”