The totality of Mayor Fischer's insurance tax should not exceed Metro Council

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The members of the Louisville Metropolitan Council do not seem ready to entrust to Mayor Greg Fischer the total increase in the tax on the insurance premiums he wants, which makes it more and more likely a smaller leap to a week a strict deadline.

The first allies of Fischer largely subscribed to a counter-plan that provides less new money and dedicates it to the payment of a pension. The other members of the council are still wondering how much they are willing to compromise.

"Once everyone puts their lines in the sand, there are still 26 left and there is not much room for maneuver," said Councilor Markus Winkler, of the 17th District, sponsor of Fischer's plan. unveiled a counter-plan last week. .

"The plan we have in front of us is about as far as people are willing to withdraw from their lines."

It is unclear whether the new proposal needs to be approved by 14 votes, but board members are running out of time to reach consensus.

Some are waiting at a marathon meeting on March 21st that could go in the early hours of the morning while they work to meet the deadlines of the state's insurance department.

If lawmakers do not spend by then an increase in the insurance tax, they will lose the chance to implement it until July 1, 2020. Fischer warned that no new income in the next budget will lead to "devastating" cuts between departments.

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It also seems increasingly unlikely that the Metro Council will implement specific budget cuts, regardless of what version of a revenue order it will adopt or reject, despite what some have called for. weeks.

Mr. Fischer had consistently urged critics of his tax hike that they enumerate reductions in city services or services deemed acceptable, indicating that a list he had published in early February would be necessary to fill the projected $ 35 million deficit in the next budget.

City Councilor Jessica Green, D-1st, also stressed the importance of the council "taking the bull by the horns" and proposing the specific cuts, partly to control the story and prevent Fischer from embarking on another " journey throughout the trip ". city ​​trying to terrorize people ".

But she said Tuesday that the idea had not been very successful in council.

And leaders like President David James, D-6th, and Budget Chairman Bill Hollander, D-9, have indicated that the revenue order would come first. According to them, a conversation about the cuts could wait until the mayor presents his budget to the council on April 25, forcing Fischer to propose some of the cuts he has been campaigning for weeks.

"For me, personally, I never thought that cuts would be part of the document (raising taxes) .I knew that cuts would be part of the conversation," said James.

James acknowledges that this approach will be difficult to explain to taxpayers.

"All you can do is tell the truth so that everyone understands it … We know we have a $ 65 million hole and we need to fill it. there is nothing secret about it. "

Previously: Louisville Metropolitan Council members meet to resolve budget hole

Pension costs vs health costs

The Fischer team said that there was a hole of 35 million dollars in the next budget, of which about 20 million come from the increase in pension payments and 15 million from the Increase in health care costs and lower than expected earnings.

The hole is expected to widen by about $ 10 million in each budget for the next four years, increasing pension payments increasing by about 12% from one year to the next. another, to reach $ 65 million in 2023 and start to cap. .

Fischer's initial proposal was to triple the tax on insurance premiums in four years, by paying pension obligations, health insurance costs or unforeseen emergencies, essentially covering the entire hole, including purely structural elements.

Winkler's plan, however, which is backed by several other initial sponsors, would expressly send all new revenues to pension costs. The remaining $ 15 million is expected to be covered by budget cuts in the next fiscal year.

"The pensions issue aside, you would have a structural hole of $ 15 million anyway," Winkler said of the mayor's proposal. "Do not confuse the two problems."

Notably, the Winkler plan does not generate enough income over four years to cover the entire pension bill. Additional savings of $ 3 million would be required during Fiscal Year 2021-2022 and an additional $ 18 million in Fiscal Year 2022-23.

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In a letter obtained by The Courier Journal, Fischer exposes some of his concerns about these figures. On the one hand, Winkler's plan does not include the complete list of cuts he hopes to find.

"Despite a $ 36 million hole, the plan calls for cuts of less than $ 11 million," Fischer writes.

And, adds Fischer, it spreads them over a few years, "leaving uncertainty to our residents and our employees."

"There should never be a moment when we go back as a city when there are alternatives in front of us," Fischer wrote to James, the chairman of the board, in the letter. "The Council has the opportunity … to continue to bring investments and opportunities to people and places in every corner of our city."

Winkler's plan would double the current tax on insurance premiums by 5% to 10% over four years, which would represent an increase of about $ 4 a month on an insurance premium of 1%. $ 000. With the same premium, the tripling of Fischer taxes would result in an increase of about $ 8 a month.

But Winkler would also impose a 3% tax on rental cars, bringing in about a million dollars a year, as well as 5% to 6.5% over four years. Fischer's plan does not require any increase in vehicle insurance.

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& # 39; This is our future & # 39;

Few other concrete projects have materialized.

Republicans, including city councilor Scott Reed, R-16th, said it was possible to find budget cuts totaling $ 35 million, but they have not submitted any proposed cuts.

Reed suggested saving money by eliminating increases for Metro employees; launch a wellness program to reduce health care increases; ask employees to pay an increase in health care costs of about $ 1 to $ 3 million; no longer borrow money for non-essential projects; stop bike lane projects; and reduce funding for violence "switches" through the Office for Neighborhood Safety and Health.

"My goal here on March 21st is to feel comfortable with $ 35 million through cuts, and I think we can do it," Reed wrote in an e-mail. "Once we have the vote on the 21st, we will have the opportunity to identify the remaining cuts in a way that works for the entire community."

It is possible that some Democrats will side with Republicans in the idea of ​​refraining from collecting new revenues and getting cuts in the normal budget process. Councilor Brent Ackerson, a member of the D-26, for example, lobbied Wednesday at the Louisville Forum to resolve the hole each year rather than taxing it in advance.

"We need hearings – it's a smart way to sort out this problem or find a common ground.This is not a negotiation.It's our future." ", did he declare.

In addition, other proposals or amendments could come to fruition in the coming week or the night of March 21 City Council. The board, unlike some other legislative bodies, allows members to modify orders on the floor of meetings without prefacing them.

The budget committee will review a version of the ordinance Thursday, ahead of Thursday's council meeting.

Darcy Costello: 502-582-4834; dcostello@courier-journal.com; Twitter: @dctello. Support local journalism by subscribing today: courier-journal.com/darcyc.