Tuesday May 20, 2003
Mayor Jerry Abramson today said the new government faces a budget gap of more than $18 million because of declining revenues and mandated costs for items such as union contracts, health insurance rate hikes and pension increases.
However, Abramson quickly added that because of the efficiencies that merger allows, basic services to citizens will be maintained without raising taxes.
“Merger gives us the opportunities to manage through these tough times,” Abramson said during a news briefing today. “Without merger, the former county and city governments operating separately would be in much worse fiscal shape.”
Abramson released the latest revenue projections showing that Louisville Metro will collect $1.2 million less in revenue in the coming budget year compared to the current budget year, which ends June 30.
This year, the combined governments – city and county – generated about $1.2 million more in revenue over the previous year. That’s far less than the $13.5 million in additional revenue the two governments had to spend in the 2001-2002 budget year.
Abramson is working to close an $18 million hole in the budget proposal he will present May 29 to the Metro Council. The gap is created by the “negative revenue growth” and more than $17 million in mandated cost increases that include:
· $9 million in union contract increases
· $3.8 million in pension fund increases · $2.7 million increase in health insurance premiums for government employees
· $800,000 to give former city police officers the same health-care coverage as their counterparts from the former county department. Taxpayers now pay all health insurance premiums for the former county police officer and their families.
· $700,000 in additional debt service requirements
To offset the gap, Abramson said the budget he will propose will include additional layoffs, the elimination of hundreds of vacant positions and maintenance funding for most departments throughout the new, merged government.
Abramson said he plans to provide more details about some of those cost-saving measures in the coming days.
“Merger allows us to create efficiencies and synergies in the combining of departments and positions, something that would be difficult – if not, impossible – with two separate governments,” Abramson said. “We are finding ways to do more with less.”
Abramson acknowledged the changes will be difficult for employees, especially those whose jobs are eliminated. “But ultimately, by right-sizing our government, we will be more responsive, more effective and more efficient in the delivery of services to the citizens of our community.”