Louisville faces 'devastating' cuts to fill $65 million budget gap

Mayor Greg Fischer announced Thursday that "devastating" potential cuts to city services and layoffs may be needed to cover an expected $65 million budget gap over the next four years.

Fischer said in a news release that he plans to decide how to fill the budget hole by mid-to-late March. The budget deficit was caused by the state-mandated pension increase that continues to grow each year, Fischer said.

The cuts could include staffing reductions in nearly every city department, as well as the closing of two of the city's 21 fire stations, four of the five public pools, four of the 10 public golf courses and one of the city's 18 public library branches, according to the release.

Under Fischer's proposal, three police classes between this fiscal year and next would be eliminated, saving an estimated 100 positions. The gunshot detection technology ShotSpotter would also be axed. 

"If we had to absorb these kinds of cuts, it would have a significant impact on the services we provide to this community as it relates to public safety," said department spokeswoman Jessie Halladay. 

Police leadership has been actively involved in conversations about the budget, she said. The cuts in academy classes would mean a smaller department, which would have a ripple effect on what services the department could provide. 

"We understand the budget realities of what we're facing and we’re hoping that the Metro Council along with the mayor’s office will find a way to address this so we don’t have to make these kinds of cuts," she said. 

Louisville Division of Fire Maj. Bobby Cooper said the potential fire station closures would "significantly lengthen fire response time."

"These cuts would be devastating and impact our ability to save lives and protect property," Cooper said. "We hope Mayor Fischer and council reach a solution that prevents this."

Jon Reiter, spokesman for Louisville Parks and Recreation, said details are still being discussed about which pools, golf courses or community centers could potentially close.

“This is affecting a lot of different departments across the board. It’s not just us,” Reiter said. “Everyone is going to feel the pain.”

Reiter noted that the city’s pools have already struggled to keep up with the budgets they have.

“Keeping them full of water and keeping them open is about as good as we’ve been able to do,” he said. He said the city has focused on adding splash pads recently, but said he recognized that “for some people, going to a spray pad won’t take the place of swimming.”

Fischer may also eliminate funding for the Belle of Louisville and all Neighborhood Development Funds and external agency funds given to local nonprofits for arts and social services.

“The Great Steamboat Race is one of the Derby Festival’s oldest events, and was started in 1963 to support the Belle of Louisville," said Aimee Boyd, spokeswoman for the Kentucky Derby Festival. "We’d be disappointed to see the historic paddlewheeler sidelined, and have confidence that our community will be able to overcome this challenge.” 

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The Louisville Zoo could become independently operated and Youth Detention Services would be turned back over to the state if the city does not find a new revenue stream, according to Fischer.

The cuts could amount to 317 layoffs for fiscal 2020 alone, Fischer's office said.

"This list of cuts is long, and the impact would be devastating," Fischer said in the release. "But we’re required to balance our budget, and without a major source of new revenue, this is what it will take to fill the gap created by the Frankfort-mandated pension obligation."

Fischer said his staff is working with Metro Council on other options to avoid the cuts and plans on releasing additional details on potential alternatives early next week.

“While we’ve been discussing this publicly for over a year, there are some people who still don’t seem to realize the seriousness of the situation,” Fischer said. “I’m sharing this list of specific potential cuts now so that everyone can understand the deep pain they would cause. And if you, like me, find these cuts unacceptable, I urge you to contact your council member and share your view."

Several council members told the Courier Journal previously that one possibility for solving the budget gap is increasing the insurance premium tax, which would have to be approved by the council by the end of March.

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Other potential options include raising property taxes, creating a taxing district or making cuts to city services.

The city faces an additional $9 million or $10 million increase in pension costs, on top of last year's approximate $9.4 million increase, as the pension hike set by the state is phased in by 12 percent a year.

“It’s important to keep in mind that this pension situation is not something that Metro Council or I created,” Fischer said, noting that the city has paid 100 percent of its annual pension bill every year. “It’s a challenge created by Frankfort’s years of inaction, exacerbated by the 2017 pension formula change.”

Fischer's Chief Equity Officer Kellie Watson said in the news release that city officials are applying an "equity lens to all decisions."

"Government tends to step in where the private sector falls short," Watson said. "Therefore, it is inevitable that cutting any Louisville Metro Government services will disproportionately impact residents and families who are struggling."

David Robertson, executive director of American Federation of State, County and Municipal Employees Indiana-Kentucky Council 962, said in a statement AFSCME is "concerned that a pattern is beginning to repeat itself when it comes to budget cuts and our hard-working members."

Robertson said AFSCME leaders have not yet been approached by city officials regarding the cuts but "need to have a seat at the table" in budget discussions.

If AFSCME members "continue to be marginalized," Robertson said, "the services they provide become marginalized as well and our communities suffer."  

"Many of the workers, who provide integral services in Louisville, are already staffed at dangerously low levels. We are concerned that proposed cuts and changes may make matters even worse," Robertson said. "We fear further cuts to the foundation of city government, the front line workers, is inappropriate when the higher levels of city management remain top-heavy."

Fischer said he has been working with city leaders and Metro Council members on potential solutions to the budget deficit.

"Many of the Council members we’ve talked with understand the difficult situation we’re in, and the need to make bold moves to ensure that the momentum we’ve built together, as a city, is not derailed by this setback,” Fischer said. "It would be foolish and short-sighted to drastically cut the services and people who got us here, especially as many of our peer competitor cities are investing even further in their communities."

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Reporters Matthew Glowicki and Allison Ross contributed to this story. Reach Billy Kobin at bkobin@courierjournal.com or 502-582-7030.