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Council members form work group to bring more tax dollars back to Louisville

Thursday October 23, 2003

Media Release
For Immediate Release

For Information Contact:
Jennifer F. Brislin

502.574.4137

Patrick H. Neely
502.574.1351

Tired of funding state government at the expense of local programs, several council members announced that they are forming a work group to look at state funding and formulas that send tax money back to Louisville.

The inequity of tax dollars sent to Frankfort vs. funds returned to Louisville reaches in the hundreds of millions of dollars each year. During the last decade, Jefferson County has lost more than $1 billion of the road-related revenues it has collected in the last decade, and it loses about $330 million in funding for education each year.

In addition, Louisville is losing much-needed resources that the federal government has given Kentucky for homeland security.

We are sending hundreds of millions of dollars to Frankfort and subsidizing other parts of the state,” said Councilman Robin Engel, R-22, who will be the chairman of the workgroup. “Louisville needs that money to enhance our schools, improve our roads and ensure our security.” “For too long, Louisville has received an extremely low return on tax dollars sent to Frankfort. The effects of this inequality can be seen every day. We are lacking the money to keep pace with the needs of our growing population and lacking the funds necessary to achieve better results in important programs such as education.”

The work group will research inequities in various funding formulas, suggest changes to those formulas and identify the unmet needs that could be filled by bringing Louisville tax dollars back to the community.

The group will issue a report before the General Assembly’s next legislative session in January and work with the legislative delegation in hopes of making substantive changes in the funding formulas.

“Ensuring that a more equitable share of Louisville tax dollars are returned to Louisville is one of our community's top goals,” said Rick Blackwell, D-12 and chairman of the Council's Appropriations Committee. “We're committed to working with the administration and the Jefferson County delegation to see that Louisville receives adequate funding to support our education, health care, economic development and quality of life needs.”

At the news conference, Engel, Councilman Kelly Downard, R-16, and Councilman Rick Blackwell, D012, pointed to three main areas of how funding inequities are harming local programs.

EDUCATION

-- The current statewide funding system, which began in 1990, has drained a net $3.4 billion from Jefferson County. That total grows by about $330 million each year.

-- The annual net drain is larger than the general fund budget at the University of Louisville and about the same as the total amount of tax revenues raised annually for our new merged government.

-- The taxes that Jefferson County residents, workers and shoppers pay to fund the large subsidy of local schools around Kentucky have caused our community to rank among the most highly taxed large cities in the United States.

-- Why it matters: Our schools need an increased investment to further improve. We have special challenges with 4,000 homeless students, there has been an 800 percent growth in students who speak English as a second language and 58 percent of elementary students have a free or reduced lunch. In addition, the Brookings Institution reported that our high school and college graduation rates lag well behind our competitor cities. It also concluded that providing “career ladders” for lower-skill workers is an essential component in being a top-tier city.

FEDERAL HOMELAND SECURITY/EMERGENCY FUNDS

-- In the last two years, $34 million in federal homeland security funds have been designated for Kentucky, and Louisville has received only $965,000.

-- Of the $11.5 million set aside for local communities in the 2003 Homeland Security Grant, 70 percent ($8.2 million) will be divided equally among 120 counties. Jefferson County will receive only $469,000.

-- Additionally, 14 regional teams have been established in Kentucky. While Jefferson County must share a region with seven other counties, Franklin County is a region by itself. (Region 6 is comprised of Anderson, Bullitt, Jefferson, Henry, Oldham, Shelby, Spencer and Trimble.)

-- Decisions about disbursement of funds are made by a working group that has no current members from Louisville.

-- Why it matters: Our community is currently without an integrated communications system that will allow police, fire and other emergency services workers to communicate. Louisville Metro will need about $40 million in additional funding to create the emergency communications system. Money that doesn’t come from federal funds will have to be borrowed.

ROADS

-- Over the last decade, Jefferson County has lost more than $1 billion of the road-related revenues it has collected.

-- The state’s current revenue sharing system for roads is antiquated. Created after World War II, the system was intended for a rural state. Today, 70 percent of Kentuckians live in areas that are not rural.

-- In 1991, Jefferson County sent $221 million to Frankfort in various road taxes and fees, including the state and federal gas tax. However, Louisville consistently receives only about 50 percent of that money back for our roads.

-- Why it matters: Jefferson County has 100 miles of deficient two-lane county through-roads. That means the roads are too narrow for safety purposes. In general, it takes about $1 million per mile to upgrade those roads. Also, growth has put a strain on roads. From 1982 to 1990, freeway traffic increased 148 percent. On major streets in Louisville, traffic increased 57 percent. A formula that is not based on population widens the gap between funds available and needs that must be met, Downard said.

“All of that growth requires an investment – one that we must begin to make here,” Downard said. “We have narrow roads that were not built to handle large amounts of congestion. This is especially hazardous for school buses. If gas tax revenues were redistributed based on population rather than land area, Jefferson County would receive $20 million in additional funds annually for road work.”

All members of the council are invited to join the work group. Within the next week, a meeting schedule will be announced. The meetings will be open to the public.

The sources for the education statistics are “Funding of Public Elementary and Secondary Education in Kentucky,” Paul Coomes, Ph.D., professor of economics and National City Research Fellow, University of Louisville, 2003; and “Our Success is Public Knowledge,” Dr. Stephen Daeschner, Superintendent, Jefferson County Public Schools, 2003. The sources for homeland security funds and the emergency communication system are federal and media reports. The source for the transportation statistics is “Transportation Financing Issues in Louisville and Jefferson County,” Paul Coomes, Ph.D., and Barry Kornstein, senior research analyst, University of Louisville, 2003.

Sponsor(s)

Julie Raque Adams (R)  18
Cyril Allgeier (D)  10
Stuart Benson (R)  20
Denise Bentley (D)  1
Rick Blackwell (D)  12
Willie Bright (D)  4
Ellen Call (R)  26
Kelly Downard (R)  16
Robin Engel (R)  22
Kenneth C. Fleming (R)  7
Madonna Flood (D)  24
Cheri Bryant Hamilton (D)  5
Doug Hawkins (R)  25
Hal Heiner (R)  19
Robert Henderson (D)  14
Dan Johnson (D)  21
Kevin Kramer (R)  11
George Melton (D)  15
Tom Owen (D)  8
James Peden (R)  23
Barbara Shanklin (D)  2
Glen Stuckel (R)  17
George Unseld (D)  6
Tina Ward-Pugh (D)  9
Ron Weston (D)  13
Mary C. Woolridge (D)  3