In a stark difference to most of his previous eight years in office, Mayor Greg Fischer presented a budget proposal to Metro Council on Thursday afternoon that included significant cuts and staff reductions throughout city government in the next fiscal year, what he said was a necessary step to fill a $35 million shortfall.
Briefing reporters on his proposed budget for the 2019-2020 fiscal year earlier in the day, Fischer noted that difference and said, “This is not the budget address that I want to give.” He began pushing Metro Council in early February to pass a tax increase on insurance premiums to create enough new revenue to eliminate the need for $35 million cuts. The council ultimately rejected a compromise proposal to bring in $20 million of new tax revenue on March 21 by a 11-15 vote.
Fischer released a spreadsheet in early February listing $35.6 million of cuts, 317 layoffs and 246 attrited position across Metro Government that could be necessary if no new tax revenue was created, but the cuts and staff reductions presented in his $623 million general fund budget on Thursday were not quite as steep.
According to a spreadsheet created by his office that details the cuts in his new proposed budget, there will instead be cuts across departments amounting to $25.5 million, as well as 88 layoffs and 224 positions lost through attrition.
While a number of agencies like the Louisville Metro Police Department, Louisville Fire Department, Metro Corrections, Youth Detention Services and Department of Public Health and Wellness had their number of proposed layoffs and attrited positions significantly reduced in the mayor’s budgets, others like the Louisville Free Public Library wound up losing considerably more jobs.
Noting that the $25.5 million in cuts fell well short of the often-mentioned $35 million budget shortfall, mayoral spokeswoman Jean Porter indicated that recent changes to the city’s revenue had lowered this figure to an amount closer to $26 million. Changes in tax and insurance receipts lowered the deficit to $32 million, and the newly implemented 3% increase to city workers’ health insurance premiums saved another $1.8 million. Lastly, the city’s revenue assumptions related to property taxes and fees increased by another $4 million.
Part of Fischer’s budget plan includes an assumption that Metro Council will choose to increase the property tax rate by 1% this fall, as a 3% increase in revenue is forecast and the city is allowed to increase this up to a total of 4%. If the council does raise that tax rate, it would generate roughly $1.2 million in new tax revenue.
The mayor indicated that such a 1% tax increase would cost the owner of a $100,000 home in Jefferson County an extra $1.80, with the owner of such a home within the Urban Services District paying an additional $3.10 on top of that.
In addition to making city workers pay more for their health insurance premiums and deductibles, certain non-union city workers will either have their salaries frozen or their expected raises from cost of living adjustments decreased. Those making over $80,000 a year will have a pay freeze, while those making under $60,000 will receive a 2% salary increase and those in between will get a 1% increase. Union employees will not be affected due to the terms of their contracts and their refusal to voluntarily agree to any type of pay freeze.
While public safety agencies will have their budgets cut by a smaller percentage than other agencies, they manage to make up a large majority of the budget together totaled nearly $10 million in cuts.
LMPD was cut by nearly $6 million in the budget and Fischer has already canceled its upcoming class of summer recruits, though the department will only lose 48 positions through attrition instead of the 100 he proposed in February. Those positions will be made up by two future classes of recruits and 17 student resources officers that will be pulled out of Jefferson County Public Schools and reassigned to street patrols.
The budget calls for closing one fire station on Grade Lane instead of the two he originally proposed, cutting the number of positions attrited in half to 15. Instead of attriting 20 additional positions from Metro Corrections — which would likely cause the department’s overtime costs to skyrocket even further — the mayor’s budget proposed to lose only one position.
While Fischer originally proposed turning Youth Detention Services over to the state — which would save $2.4 million and lay off 118 workers — his budget scraps that plan.
The health department was also spared cuts that Fischer originally proposed in February, as only one employee will be laid off instead of 22, and plans to close the city’s STD clinic and immunization program, cut back syringe exchange hours and reduce HIV personnel were abandoned.
One health program administered through the department that will have its $1 million of funding eliminated is the Living Room Project of Centerstone Kentucky, which helps divert people with mental health or substance abuse issues out of jail and hospitals and into treatment and services. While supporting the program, Fischer said that it was not cost-efficient, as the city spends nearly $500 for every unique visitor that the Living Room serves.
The city’s four outdoor pools will remain closed, as Fischer said they are also not efficient, costing the city $45 per swim. While the city golf courses will remain open through the summer, the budget kept the mayor’s earlier proposal to close and repurpose four beginning in the fall.
Public libraries probably took the biggest hit of any department, which added up to considerably more than what Fischer first proposed in February. Instead of one branch closing, the city will close both the Middletown and Fern Creek branches, in addition to operating hours in most libraries being cut from 12 to eight. While the mayor first proposed 35 layoffs and one attrited position, his budget now lays off 57 workers — nearly two-thirds of the total city employee layoffs — and loses 35 positions through attrition.
The proposed budget would cut the offices of the mayor, Office of Management and Budget and Internal Audit by over $1 million through personnel reductions, including to layoffs and 16 positions lost through attrition.
While Fischer had originally proposed eliminating the $2 million in Neighborhood Development Funds that council members allot to nonprofits and projects in their districts, the mayor’s budget instead cuts just over $1 million from their budgets, reducing each members’ NDFs by $30,000 and operating budget by $10,000.
The mayor’s proposed capital budget on bonding is the lowest in six years, cutting the street paving budget by $3 million from last year and lowering spending on affordable housing from $12 million to $7 million.
Surviving in the mayor’s budget is $1 million for homeless services, continuing the emergency services funded by Metro Council in December for low-barrier shelters and a temporary storage facility.
In his budget address to Metro Council, Fischer struck a more conciliatory tone with members who voted against his proposed tax increase, noting that it was an especially hard vote to make for those who were just sworn into office two months earlier.
However, Fischer did note that peer cities that Louisville competes with are raising the revenue needed to fully invest in their cities, noting that Nashville recently spend $500 million on affordable housing and is spending $70 million on infrastructure and paving this year.
“Be mindful that while we deal with this budget-driven budget challenge, other peer cities — Nashville, Cincinnati Indianapolis, many others — are investing in themselves, their infrastructure, transportation and quality of life at a much higher rate than we are,” said Fischer.
Noting that his staff did their best to cut more from management and supervisor positions than frontline workers, Fischer added that “I hate the stress and uncertainty they and their families have been living with the past few months. They deserve better.”
The press release from the mayor’s office announcing his new “austere” budget noted that it “brings (a) businessman’s approach” to addressing the city’s “$35 million deficit” after the council rejected new revenue.
Leadership in both parties of Metro Council held a news conference after the mayor’s address, noting that no members had yet had a chance to review the budget.
Both Council President David James and Councilwoman Jessica Green stated that they were immediately concerned with the 48 officer positions cut from LMPD.
Asked about the difference in amounts between the $35 million shortfall that Fischer has cited for months and the $25.5 million in cuts that were in his budget, James stated that the mayor was originally working with numbers that were not very detailed, but now his office has been able to find additional revenues.
Both Green and Councilman Kevin Kramer — the chair of the Republican caucus — cited the $10 million decrease in cuts Fischer was proposing to express a degree of vindication over voting against the tax increase, saying that the council will now pour over the numbers to see if they find additional efficiencies or revenue.
“What that tells me is the 15 of us that voted no on this tax increase were not willing to jump from the ledge because we weren’t dealing with actual numbers,” said Green. “What this whole process will allow us is time. The time that I feel the people of Metro Louisville deserve, the time that the council members deserve to be able to make adequate decisions.”
Metro Council will conduct numerous budget committee meetings over the next two months, in addition to several meeting to take comments from the public, with the council set to approve a budget in their last meeting of the current fiscal year on June 25. The full schedule of those meetings can be viewed here.
This story has been updated.