LOUISVILLE, KY (WAVE) - Louisville Mayor Greg Fischer’s latest proposal to combat the city’s growing budget deficit includes cutting hundreds of jobs.
The mayor addressed a packed Metro Hall on Thursday, detailing his plan ahead of Metro Council’s latest round of discussions on the hot-button budget issue. (Watch his entire address at the bottom of this story.)
Earlier this year, Fischer said the deficit was $35 million. That has since been decreased to $32 million.
“Changes in tax receipts, worker’s compensation and auto insurance expenses and our employee healthcare cost, our starting deficit has decreased,” Fischer said.
Fischer started off by noting that there are going to be cuts in every department, including the elimination of 312 metro government positions, about a third of which would be through layoffs.
The mayor blamed the need for austere cuts on both the Metro Council’s inability to pass an insurance premium tax increase and the pension crisis. He proposed an insurance tax increase to cover some of the shortfall, but that was voted down last month.
“That’s due primarily to two main issues. First is the huge increase in our state pension obligation. A debt not created by any of us, but a debt we’re still required to pay,” Fischer said. “The second is this body’s vote against revenue to avoid cuts in services.”
Cuts to public safety were less than anticipated, but significant. LMPD faces a reduction of about $5.5 million.
That includes the reduction of about 40 officers. (Story continues below video.)
Fischer said it was impossible to not touch public safety at all. Given the size of the shortfall and the fact that public safety makes up 60 percent of the budget, Fischer called its exemption “impractical.”
“For example, we could completely, completely eliminate Metro Parks and Recreation, the Louisville Free Public Library, Louisville Zoo, Metro Animal Services and our entire Codes and Regulations team and and we’d still be millions of dollars short of resolving our multi-year budget challenge,” Fischer explained.
Other changes include the cancellation of an LMPD recruitment class scheduled for June and the elimination of school resource officers in JCPS schools. Those officers will be put back on the streets.
If the proposal is passed, the city would also cut funding for The Living Room, a program that assists people with mental illness and substance abuse. This would save $1 million. Fischer said he fears the move could lead to increased overdoses and homelessness.
“When you have a budget that is being cut and cut and cut, there isn’t money to deal with issues but the private sector, churches, houses of worship,” Fischer said. “I hope [Metro Council members] look at this and say we can do more. That kind of assistance is what we need from both citizens and companies, when you have a lean budget like we do.”
Fischer said his proposed cuts were made by analyzing each department’s expenses. Now, Metro Council will review his proposal. The mayor said he’s hoping revenue-creating alternatives will be discussed.
The budget assumes Metro Council will increase property taxes to four percent. That would generate about $1.2 million, but is far from what’s needed to fill the budget shortfall.
Councilmembers will have to make that decision before they can even enact the revenue.
“Because if we pass a budget that assumes those and are not willing to vote for those in July or August, I guess we obviously have a $1.2 million hole in our budget,” Councilman Bill Hollander said.
President David James said Metro Council would like to look into a restaurant tax or occupation tax for additional revenue – but they need support from Frankfort.
“There are other options out there for revenue but most of them depend on the state allowing us to utilize those opportunities,” James said.
Councilwoman Jessica Green said she feels better about the time the council has to make the budget decision now, opposed to the insurance premium tax vote earlier this year, but the cuts are hard to swallow.
“They are not going to really sit well with a lot of people, myself included," Green said. "So, we’re looking for other options.”
Specifically, Green said that means public safety for her district.
“Because I represent a disenfranchised district where we’ve got some major issues, I don’t really feel like the people can handle having less officers,” Green said.
Fischer said estimates coming out of Frankfort were readjusted this week that show the pension problem willing be going on longer than expected.
The council will adopt a final budget on June 25.
The budget committee has scheduled public hearings for May 7 at 6:15 p.m., May 16 at 6 p.m. and May 20 at 6 p.m.
Here are highlights of the 2020 budget hearing schedule:
- Metro Parks & Recreation - Wednesday, May 8 at 4:30 p.m.
- Louisville Forward, to include Economic Development, Develop Louisville, Codes & Regulations and the Affordable Housing Trust Fund - Monday, May 13 at 3:30 p.m.
- Louisville Fire – Tuesday, May 21 at 5:30 p.m.
- Safe & Healthy Neighborhoods – Wednesday, May 22 at 4:30 p.m.
- Louisville Free Public Library – Wednesday, May 29 at 3:30 p.m.
- Public Works and Assets – Wednesday, May 29 at 4:30 p.m.
- Emergency Services – Thursday, May 30 at 3:30 p.m.
- LMPD – Thursday, May 30 at 4:30 p.m.
- Public Health & Wellness – Monday, June 10 at 3:45 p.m.