Lexington homelessness commission recommends raising insurance-premium fee

bfortune@herald-leader.comJanuary 29, 2013 

  • Highlights

    Here are the top three recommendations of the Homeless Commission's report:

    • Increase the fee on insurance premiums 1 percent to create an Affordable Housing Trust Fund and to implement recommendations of report.

    • Set up office within city government to coordinate homeless services.

    • Create more affordable housing units to meet the needs of homeless and near-homeless.

The Mayor's Commission on Homelessness recommended on Tuesday that Lexington create an office to coordinate services to the homeless and to individuals in danger of becoming homeless, but the question left dangling was how the office would be funded.

The commission recommended increasing by 1 percent the fee the city levies on insurance premiums, excluding health insurance. Increasing the fee from 5 percent to 6 percent would raise about $4 million year.

Half of that money would fund a new office to deal with homeless issues. The other half would go toward creating affordable housing for sale or for rent. Affordable housing units could be public housing or housing developed through public-private partnerships. These were recommendations from the Affordable Housing Trust Fund, which were folded into the homeless commission's report.

The Commission on Homelessness, appointed last summer by Mayor Jim Gray, reported its finding to the Urban County Council at its work session Tuesday. Councilman Steve Kay and businesswoman Debra Hensley chaired the citizen's group, which was charged with examining homelessness in Lexington.

The mayor's establishing the commission was prompted by several incidents, including the impact on Phoenix Park of several downtown feeding programs for the homeless and the city's attempts to close down The Community Inn on Winchester Road, charging it with illegally operating a nighttime sleeping shelter for homeless men and women.

Homelessness is not only a humanitarian concern, but an economic one, Kay said. Referencing a federal Department of Housing and Urban Development report, he said a homeless person can cost the community between $35,000 and $150,000 a year for such things as medical care and going to jail. The cost of getting the same person off the street by providing stable housing and other services is between $13,000 and $25,000 an individual, Kay said.

Council member Chris Ford said the community was already paying "an enormous price for homelessness," and he said providing funds to put the homeless and near-homeless in stable housing was the morally right and economically responsible way to deal with the situation.

The report said the way to reduce homelessness was to ensure adequate housing for those most in danger of becoming or remaining homeless. This refers not only to people sleeping under a railroad viaduct, but individuals who work but don't have enough money for an apartment.

There are critical moments when a modest level of support combined with decent housing will keep those on the edge of homelessness from becoming homeless, the report said.

Kay said 90 percent of the homeless could be kept out of shelters if there was more intervention.

To increase the fee on insurance premiums and have it take affect this fiscal year, council would need to approve it by the end of March.

The idea of raising insurance premiums, whether it's called a tax or a fee, received immediate pushback from council member Bill Farmer.

Farmer said while he agreed with the commission's report on the importance of dealing with homeless issues, council was being asked push the increased insurance premium through committee in February in order to see the tax approved by the end of March.

"It sidesteps some of our deliberative nature. For me, it places us in an uncomfortable breach with the taxpayers," Farmer said. "To my mind, this would be the first true fee or tax increase in this administration ... We are at a soul-searching time, and I would prefer the time to search the soul."

Funding an office of homeless and affordable housing should be made as part of the budgeting process and not as a stand-alone proposal, Farmer said, adding, "I am not sure there are eight votes or mores and a willingness to act at this time to add a fee/tax before we do anything else in Lexington for this issue."

The report was referred to the Budget and Finance Committee, where an increase in the insurance fee will be discussed and the public will have the opportunity to weigh in.

After the meeting, Mayor Gray said he was "very impressed" with the commission's report. He said he supports the recommendation that city government take a more active role and establish an office dealing with homeless issues.

"But before any taxes are raised, I want to study this report. We've had to work really hard to control out-of-control spending," he said.

The mayor said he especially liked the idea of establishing an office to coordinate services for the homeless "because I learned in business where everybody's responsible, nobody's responsible."

That office could look for ways to support homeless programs already in place and find ways to fund affordable housing initiatives.

"There is a pressing need for this issue to be responsibility managed with effective leadership," Gray said.

Hensley said she believes there will be "a lot of support in the community for the commission's recommendations, because there will be a lot of cost savings. I am hopeful."


The top three recommendations of the Homeless Commission's report:

Increase the fee on insurance premiums 1 percent to create an Affordable Housing Trust Fund and to implement recommendations of report.

Set up office within city government to coordinate homeless services.

Create more affordable housing units to meet the needs of homeless and near-homeless.

Beverly Fortune: (859) 231-3251. Twitter: @BFortune2010

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