Mayor Linda Gorton announced dramatic changes to the Lexington–Fayette Urban County Government budget Tuesday morning in light of the COVID-19 epidemic and its local economic impact.
“With fixed costs increasing, and shortfalls in tax receipts, there must be cutbacks elsewhere in government to keep our basic services functioning well, and our budget balanced, as required by law,” Gorton said. “Before I get into the details I want to be clear, this is not the kind of budget I want to propose. It does not fund many of the programs I think our community needs, like land preservation or neighborhood initiatives or infrastructure improvements. It is not the kind of budget we want, but it is the kind of budget the times demand.”
The $372,643,779 million General Fund budget is focused on the “nuts and bolts” of government — including public safety, garbage pickup, sewers and roads — and is designed to balance the budget in the face of realized and projected costs of the COVID-19 crisis, including a loss of $9 million in FY20 (current year) and $40 million in FY21 (July 20-June 21).
Details include:
- Internal reductions that include $7.5 million in personnel savings with no lay-offs of permanent employees, and a freeze on pay raises except where required by contract. The city will not fund 47 vacant permanent positions.
- Internal targeted reductions of $12.6 million throughout government.
- A reduction of $6 million to external agencies, including extended social resource grants to social service agencies.
- Public safety, 57 percent of the general fund budget, remains the same as last year.
- A $1.8 million reduction in funding to the affordable housing program.
- The city will suspend direct funding of LexArts. Instead, the mayor announced a challenge grant of up to $200,000 from the city that will match funds raised by LexArts, dollar-for-dollar, after July 1.
- The city will also issue a request for proposals to fund economic development partners, including Commerce Lexington, the Downtown Lexington Partnership, the World Trade Center and the Urban League. The city will maintain workforce development funds.
- The use of one-time money to balance the budget, including $13.6 million from a rainy day fund. This is the first time the fund has been used since it was established in the 1990s.
- Debt service for a $7.6 million bond, the smallest bond in 10 years, including $5 million for paving, $1.7 million to replace police vehicles and $343,000 for fire turnout gear.
The mayor also announced the formation of a COVID-19 Economic Response Committee, made up of leaders from across various sectors of the economy and councilmembers, to formulate recommendations to move the economy forward. Gorton will co-chair the committee, along with Luther Deaton, chairman/president and CEO of Central Bank & Trust Company. Bob Quick, president and CEO of Commerce Lexington, will serve as vice chair of economic development. Mary Quinn Ramer, president of VisitLEX, will lead the visitor industry as vice chair.
“We are taking a broad look at our economy. Everything from small business to health care to manufacturing to education to agriculture to tourism, and beyond,” Gorton said.
Mayor Gorton also said work has begun to set up a “one-stop shop” inside local government to make the interaction between business and government as fast and efficient as possible. The mayor also announced that 600 to 700 new, good-paying jobs would soon be coming to the city.
“I remain optimistic about our future, and so do our citizens,” she said. “We believe in our city, and we’re ready to put in the hard work it will take to stand up our economy.”