dmartin
In June, the Urban County Council completed its review and approval of Lexington’s budget for fiscal year 2013, which started on July 1. While I supported most of the items, in the end I voted against this year’s budget over concerns with Lexington’s pension crisis.
In April, Mayor Gray proposed a $289 million general fund budget with expenditures for a number of priorities – funds for two new police classes and two new firefighter classes, $1.25 million to match state dollars for a Rupp Arena district study, a 2.5 percent raise for employees in the lower half of the pay range and a 2 percent raise for employees in the upper half of the pay range, $388,000 for park improvements, $1 million for the Purchase of Development Rights Program, and a $16.2 million cash contribution and a $34 million bond for the police and fire pension fund. You should know that non-sworn employees hadn’t received a decent pay raise in years.
During the budget process, the council restored funding to complete an important storm water project on Cardinal Lane. The council also approved funds for the Lexington Corridors Commission, so our trees and landscaping won’t die from the summer heat. I was also pleased that the council approved my request to continue a $100,000 sanitary sewer grant program, which helps homeowners to resolve chronic sewer backups. Frequent sewage in your basement is not good.
The council chose not to approve two of my requests for trails, including a $1 million bond for state and federal trail grants that match our local funds four to one, and funds to hire a dedicated trails manager to acquire right-of-way for new trail projects. Lexington’s trail system is a community amenity that helps us attract high paying jobs to the area while improving the health of our citizens. I believe pedestrian trails are well worth the investment, and I’m sure most physicians will agree with me.
Despite many positives, I was unable to vote in favor of the 2013 Budget. First of all, we should not add new police and firefighter classes until we resolve the crisis with Lexington’s police and fire pension fund. There is no doubt that we need them, but it is wrong to commit ourselves to generous pensions for these new employees when we can’t pay for the promises we have already made. As of July 2011, we owed about $585 million for our public safety pensions, pension bond debt and medical benefits, and it’s only going to get worse.
I also cannot support the continued use of pension bonds to pay down Lexington’s unfunded pension liability. Issuing bonds to settle a lawsuit is one thing, but borrowing money each year to gamble in the stock market is a very bad idea. Issuing bonds to make LFUCG’s annual required pension contributions is a sure sign that Lexington is living beyond its means and can’t pay its bills.
Lexington doesn’t have a revenue problem; we have a public safety crisis. Our revenues are increasing, but for the past decade we have been diverting funds from government services to public safety. Since 2002, LFUCG’s annual general fund revenue grew by $87 million, more than 80 percent of which has gone to police, fire, corrections and now debt service on pension bonds. Yet since 2002, funding for social and community service partner agencies grew by just $229,509, and funding for arts and cultural agencies has grown by only $4,510.
Public safety is the most important thing we do, but it is not the only thing we do. If we don’t embrace urgent and immediate pension reform, Lexington’s citizens will see higher taxes and deeper cuts in services for many years to come.
Doug Martin is the 10th District Council Representative. He can be reached at dougmartin@lfucg.com or (859) 425-2285. For updates, visit his Council web page at www.lexingtonky.gov/District10.