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Metro Newsroom

New plan would repeal living wage ordinance; provide education, child-care, transportation incentives

Thursday April 3, 2003

Media Release
For Immediate Release

For Information Contact:
Jennifer F. Brislin

Patrick H. Neely

LOUISVILLE -- Two ordinance requests are being delivered to the Jefferson County Attorney’s Office today. The first will seek a repeal of the “living wage” ordinance, which was passed 8-3 during the final Board of Aldermen meeting on Dec. 17, 2002 to override Mayor David Armstrong’s veto. The second proposed ordinance would provide education, child-care and transportation incentives for Metro Government employees.

“Instead of a Band-Aid approach of giving someone a few hundred dollars a year, we will be helping them obtain the tools and education needed to qualify for a higher-wage job – one that will lift their families into a higher standard of living,” said District 19 Metro Councilman Hal Heiner, who is vice chair of the Republican Caucus and primary sponsor of both ordinances.

“The biggest obstacle of obtaining better, higher paying jobs is a lack of education. This plan removes barriers to education by providing free tuition as well as transportation and child-care subsidies.”

Heiner cited a U.S. Census Bureau study that found that workers with a bachelor’s degree will earn almost twice as much as those who graduated from high school during a 40-year career.

The Metro Government’s internal auditor has said that the current living wage ordinance, which is set to go into effect July 1, would cost the taxpayers more than $20 million in the first year and $67 million by the time it is fully implemented in 2005.

“Instead of assisting the 223 full-time workers who this ordinance proposes to help, the living wage ordinance would cost $67 million and give more than 2,000 people additional wages and benefits,” Heiner said. “It is a budget-buster, and an extremely inefficient way to help lower income workers because most of the money expended to make this ordinance work will be spent outside of the group of 223 that the ordinance’s sponsors sought to assist.”

In addition, the Board of Aldermen’s ordinance would force many nonprofit or business that received government funds to almost double the federal minimum wage, which would severely hamper their ability to serve the community.

How It Works

The new proposal – called W-5 – is a five-point plan that would focus solely on full-time government employees who have received Earned Income Tax Credits.

According to the IRS, approximately 10 percent of taxpayers filing their returns are eligible for EITC. There are 6,366 full-time Metro Government employees, which means W-5 could help more than 600 employees and their families. (The number is based on that assumption because Metro Government cannot determine marital status and, as a result, household incomes because of privacy reasons.)

Based on income, subsidies for child care would be distributed to Metro Government workers who have received EITC. In addition, the nonprofit Community Coordinated Child Care (4-C) would counsel families and help them find appropriate day care.

Here’s how it works:

1. Education: 100 Percent Reimbursement

Employees who have received EITC will be eligible for 100 percent education reimbursement up to $3,000 per year, which could be used for college, vocational school, an associate degree program or GED. In addition, every employee will be eligible for $2,000 per year in higher education reimbursement.

2. Child Care Subsidies

Based on income, subsidies for child care would be distributed to Metro Government workers who have received EITC. In addition, the nonprofit Community Coordinated Child Care (4-C) would counsel families and help them find appropriate day care.

3. Transportation Assistance

Metro Government will pay for 80 percent of a TARC bus pass for employees who have received EITC, which will help employees get to work and class. It also will have environmental benefits. (The current 50 percent reimbursement for all employees will continue.)

4. Resource Guidance

The Human Resources Department will be required to dedicate a staff person to spend at least 20 hours a week working with employees who have received EITC by educating them on the other programs available through the Human Services, Housing and Health departments. The staff person also will recruit employees who are eligible for EITC funding but have never filed to receive it.

5. Immediate Assistance: W-5 Forms

EITC beneficiaries can begin receiving tax benefits immediately rather than waiting until tax time. By filling out a W-5 form, which will be placed in all employee packets, EITC beneficiaries would receive their tax benefits in each paycheck.

Total new costs of the program are estimated to be $360,000.


Hal Heiner (R)  19