Lexington council approves $473 million budget, with two members voting ‘no’
The Lexington-Fayette Urban County Council voted Tuesday to approve a $473 million spending plan that includes no tax increases, 5% raises for most city employees and millions more to retain public safety employees.
The $473 million budget for the fiscal year that begins July 1 also includes several new programs like a $3 million fund to give zero interest loans for developers to build infill projects and $1 million for a program for nonprofits to take abandoned property and turn it into affordable housing.
It also includes an additional $375,000 for One Lexington, the city’s violence prevention programs, as the city is in the midst of a surge in shootings and murders. Other new programs include $260,000 for a new mobile food grocery store for neighborhoods who have limited access to food.
Lexington Mayor Linda Gorton had originally proposed a $460 million budget, that used approximately $40 million in one-time money from various city accounts. The council added approximately $13 million, including $5 million for additional pay to retain public safety employees — like police, detention center and E911, which have had staffing shortages over the past 12 months.
The council also voted to add $2 million for paving, bringing the total amount the city will spend on paving roads to $15 million. Other changes include $2.5 million for a study of the Versailles Road corridor, $750,000 for various infrastructure improvements for the Distillery District and Manchester Street and $172,658 for enhanced lighting to improve safety around Tandy Park near Main and Short streets.
The council approved most of those changes on May 31. Most of the money came from a city savings account. The $473 million budget is a 18% increase over the current-year budget of $401 million.
Susan Straub, a spokeswoman for Gorton, said Gorton does not plan on vetoing any of the council changes.
‘Raising taxes’
Councilman Richard Moloney voted against the $473 million budget, the largest budget in city history.
The city is projecting $419 million in revenue next year. That’s based on a 4.9% revenue increase from the current year. The city has seen its payroll taxes — a tax on wages — surge over the past 18 months, due largely to increases in wages.
Moloney said during a June 6 council meeting those economic indicators show that 4.9% growth in revenues is too optimistic.
“The proposed revenue projection of 4.9% is not realistic,” Moloney said. “In the past, the most we have projected has been 4%. This is not the time for an overly optimistic figure. If anything, revenue will more than likely decline since its primary source is payroll tax.”
Finance Commissioner Erin Hensley has previously said the city believes that revenue estimate is accurate based on the increase in various revenue streams it has seen over the past 18 months. Moreover, that revenue projection was done in consultation with economists at the University of Kentucky.
Moloney said Thursday he did not believe the city should have spent so much money from savings. Gorton and the council allocated all but $455,000 of $25.1 million in a city savings account.
The city hasn’t budgeted enough for rising fuel costs. The next two years will be tight, he said.
“We are on track to have to raise taxes,” Moloney said. “Don’t blame the police department for raising taxes.”
Councilman David Kloiber, who is running against Gorton in the November general election, said, he, too, thought the city was using too many one-time funding sources for ongoing expenses.
“The budget is a road map,” Kloiber said. “This particular road map does not have a clear path to the future.”
Kloiber said the city was spending too much now and will likely have to raise taxes in future years to pay for ongoing expenses.
“I am concerned that it will lead to furloughs, lay offs and tax increases,” Kloiber said.
Other council members said the budget may not be perfect, but the city and council had to address long-term capital needs that have not been touched in years. It has also been advised to expend money in savings accounts.
“We tried to do it in such a way that represents the full interests of the community,” said Vice Mayor Steve Kay. “Council members have not offered cuts to the budget.”
Kay said the city has been advised by bond rating companies such as Moody’s and Standard and Poor’s not to use one-time funds to balance the budget.
Councilwoman Amanda Bledsoe, who chairs the Budget, Finance and Economic Development Committee, said she has heard criticism that the city had not put enough money into the public safety budget, particularly police.
That’s not accurate, she said.
Lexington Police Chief Lawrence Weathers said the department has received adequate funding for the next fiscal year.
“We got what we need and then some,” Weathers said during Tuesday’s work session. “Thanks for listening to us. Thanks for taking into consideration some of the things that we need. “
This story was originally published June 14, 2022 at 5:18 PM.
