Ky. Voices: Make fiscal courts responsible for oversight of taxing districts

Give responsibility to county fiscal courts

February 18, 2013 

Cheryl Avioli, who served on the Public Service Commission in New York before moving to Nicholasville, was hired by the state auditor to study special districts.

  • At issue: Feb. 6 Herald-Leader article, "House bill targets 'ghost government' tax districts; online database would provide transparency"

The Herald-Leader should be commended for reporting on special districts for decades. I hope such news reports, as well as state Auditor Adam Edelen's and Sen. Damon Thayer's fervent interest in the issue, will move state lawmakers to finally create the reform needed this session.

We need to wake up and take notice that these little districts add up. We pay $2.7 billion to special districts every year, and about $1.3 billion more of our money is being held in reserves. Special districts spend more in taxes than all but three counties' governments. These districts provide special public services such as fire protection, libraries, airports and roads.

The folks who run the districts generally help county and state officials get elected and re-elected. No politician really wants to alienate this group. Maybe that's why they haven't been accountable to any elected official for 100 years.

No elected official — not one — is directly responsible for approving or overseeing this money. No elected official is responsible for approving special district budgets, debt load or tax rates. The current system was designed by elected officials to allow them to hide from tax increases. The legal structure makes it easy for them to blame the ubiquitous "someone else."

In America, we pride ourselves on having an elected government to represent our interests and make hard decisions. That is why we need:

• Fiscal court oversight of special districts. Fiscal courts approve creation of these districts; they should be accountable for them, too. It's common sense.

• Special districts that don't comply with financial reporting requirements or that have negative audit findings should be dissolved, and their assets and powers returned to the counties.

• Specific reserve funds should be set, and anything over that amount refunded to the public.

• A special district that is run by the county but files its financial reports separately should be identified in state law as a special district. Many of these entities argue they aren't special districts and so are above the law. What are they hiding?

• State approval should be required before special districts incur debt or extend their service territories. State elected officials should determine whether taxpayer debt is in the public interest and whether there is a duplication of services before extending districts.

• An annual list of average costs of special district services should be posted by the state so citizens and officials have context when considering just and reasonable tax rates.

Some officials might be willing to approve only the creation of a special-district database, which will not alone cure this problem. It can be a helpful tracking tool, but if it is too costly or presents misleading information to the public, it will make the problem worse. It also makes it appear to the electorate that something is being done in cyberspace, but in reality it is not.

Politicians cannot delegate regulatory authority to a database. A database is not going to ask the tough questions of special district board members in a public setting. A database is not going to analyze or punish special district board members for negative audit findings. A database is not going to approve rates.

A database is not going to decide whether a special district should incur debt. A database is not going to recommend other sources of financing. A database is not going to reduce inefficient spending practices.

If the database shows only whether special districts filed reports, it will not be helpful. It's the substance of the reports that is essential, and elected officials need to study them, hold public meetings about them and make these documents a part of the public record.

Contact your legislator. Ask that he or she make fiscal courts responsible for special districts. The meter is up on 100 years of hidden government. Politics should never get in the way of common sense.

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