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Metro Newsroom

Budget Will Require Tough Choices

Wednesday May 5, 2004

Mayor Jerry Abramson said today that Louisville Metro Government faces an increase of $20 million in mandated costs - such as union salary increases and rising health insurance premiums - forcing a continued search for savings in next year’s budget.

“We start the budget process with a locked-in commitment to spend about $20 million above and beyond current costs on union salary increases, health insurance costs, workers’ comp insurance payments, pension fund deposits and debt service,” Abramson said. “So once again, we know that we must find ways to cut dollars and create efficiencies in our existing budgets to make dollars available for these mandated costs.”

Abramson, however, emphasized that basic services would not be compromised and taxes would not be raised in the budget he proposes to the Metro Council on May 27. And, he added, the budget will offer some new initiatives and critical additional investments in basic services.
“We will continue to invest our available dollars in the priority needs for this community - safety, services, quality of life and economic development,” Abramson said. “Unlike other communities, we have been able to weather the economic storm of the last few years without raising taxes or reducing services. And we’re better positioned than many cities to move forward in the coming years as a result of the steps we’ve taken.”

Still, personnel - salaries, health insurance pensions and benefits - represent the government’s largest cost by far and the new government has placed an emphasis controlling those costs, a focus that will continue, he said.
As a result of the continued rising mandated costs, there will likely be some reductions in personnel. Abramson, though, said he does not anticipate reductions on the scale of last year when nearly 700 funded positions, including 125 layoffs, were eliminated.

In fact, Abramson said there may be some areas where staff is added as responsibilities are increased.
Abramson also said he hopes to provide modest salary increases for those government employees who did not receive pay raises last year. About one-third of the workforce is not unionized. Those employees went without pay raises.

Abramson is asking union employees to go without raises in the first year of new contracts. Several unions already have agreed to that measure, and Abramson thanked those employees today for sharing “the sacrifice” that many people are making to help the new government work.
Nevertheless, Abramson stressed that Louisville Metro Government is in a much better financial position today than it was 16 months ago as the new, merged government went into operation.
Abramson cited cost-savings measures and efficiencies that were gained by reducing the size of the funded government workforce by 10 percent, improving management by combining functions among departments and agencies and saving taxpayer dollars through more efficient ways to conduct the business of government.

The success of those efforts, Abramson said, is exemplified by the fact that even though other cities across the country were forced last year to slash services - such as police, fire, and libraries - Louisville Metro Government maintained basic services without raising taxes.

And Abramson said two leading Wall Street rating agencies increased the credit rating of the new government. Louisville Metro is now among the best rated local governments in America.

“The budget plan that I will present,” Abramson said, “will continue the strides we are making to give people of our hometown what they deserve - efficient, effective government that delivers the services that people expect.”