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Metro Newsroom

Councilman files ordinance to repeal living wage Alternate plan focuses on education, other incentives for government workers

Monday April 21, 2003

Media Release
For Immediate Release

For Information Contact:
Jennifer F. Brislin

Patrick H. Neely

LOUISVILLE – Councilman Hal Heiner, R-District 19, filed two ordinances today to repeal the so-called “living wage” ordinance and replace it with an education plan for working families in government.

The ordinances will receive their first reading Thursday and expected to be assigned to the Labor Committee for a hearing.

“Our education plan would truly help families raise their standard of living – not just be a Band-Aid, as the living wage ordinance would be,” Heiner said. “These ordinances will save taxpayers $20 million in the first year and $67 million by 2005.”

Those numbers are based on an analysis from the Metro Government’s internal auditor, who has stated that the current living wage ordinance, passed by the Board of Aldermen last year, would cost the taxpayers more than $20 million in the first year and $67 million annually by the time it is fully implemented.

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.

“It’s a budget-buster – for our taxpayers, our businesses and the nonprofits that provide valuable services to our community,” Heiner said.

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. Businesses and nonprofits would not be affected.

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.) Here’s how it works:

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. 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

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.)

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.

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, they would receive tax benefits in each paycheck.

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


Hal Heiner (R)  19