FRANKFORT, Ky. (KT) – Kentucky’s pension crisis and state tax reform bubbled to the top of a list of concerns expressed by leaders representing the interests of local governments.
City and county officials had the opportunity to vent their concerns to the General Assembly’s Interim Joint Local Government Committee on Wednesday.
David Nicholson, president of the Kentucky Association of Counties told lawmakers their No. 1 priority for 2018 is pension reform.
“KACo recognizes maintaining the status quo is not sufficient nor sustainable,” Nicholson said. “We do support the separation of the County Employees Retirement system from the Kentucky Retirement Systems, but are mindful that may be a discussion for another day.”
He reiterated KACo’s pledge to work with the legislature to make changes due to the pension crisis, “while also protecting the investment in public service made by our members.”
The organization’s second priority is tax reform.
“Like the state, many of our county governments are facing crushing financial demands,” Nicholson said. “It is imperative, that as the legislature considers tax reform, that you have a serious option with our county leaders about the limited options facing our fiscal courts.”
He said between unfunded mandates and the lack of revenue options, “many of our counties face a looming crisis under their current budget constraints.”
Among the options KACo hopes are adopted, a local option sales tax that would allow cities and counties to put the tax issue to a vote. If voters approve, any issue-related tax would end when a project is complete.
Such legislation has been introduced over the past couple years, but has never cleared the General Assembly.
Johnathan Steiner, executive director of the Kentucky League of Cities, also testified before the committee.
“Cities need to have more flexibility in how they obtain revenue,” Steiner said. “The playing field, even among cities, is not equal and we need to rectify that.”
Richmond Mayor Jim Barnes, also president of the Kentucky League of Cities, asked lawmakers to allow all cities to enact a restaurant tax.
“The city of Berea has a restaurant tax, while in Richmond, 10 miles away, I can’t have one,” Barnes said. “The state doesn’t have to do anything. Local government can either vote it in or vote it out.”
The Kentucky League of Cities also wants to allow the county retirement system separated from the state’s retirement system.
Kenton Commonwealth’s Attorney Rob Sanders, legislative co-chair of the Commonwealth Attorneys Association, said his concern was that Gov. Matt Bevin’s proposed 17.4 percent spending cut “would shut down commonwealth attorneys’ offices in March.”
Larue County Judge Executive Tommy Turner, legislative chair of the County Judge Executive Association told the lawmakers he doesn’t envy the difficult task lawmakers face.
“You have more important decisions to make over the next six months, than during the past 10 years,” Turner said.