Louisville, Lexington facing budget woes, but Owensboro faring well, so far

Mark Hebert with WHAS-TV is reporting that Louisville Mayor Jerry Abramson is preparing to announce budget cuts because of a downturn in occupational tax revenues. 

In Lexington, city officials are grappling with possible layoffs in the police and fire departments to try to counter an expected $20 million jump in pension costs next year, according to the Herald-Leader

State government and Gov. Steve Beshear are in the midst of developing a plan to deal with an expected $300 million shortfall this fiscal year, and Tom Loftus reports today that budget cuts will be difficult for agencies that already trimmed spending earlier this year.

But J.T. Fulkerson, finance director for the city of Owensboro, said Friday that this city is faring better than others as the economy turns south. 

Occupational tax revenues collected in Owensboro through the end of October were 4.6 percent ahead of budget and more than 6 percent higher during the same period last year. Expenditures have also been kept under budget so far, Fulkerson said.

“By having a diverse base with no extremely large employers that are usually impacted severely in these types of downturns, we have not in the past experienced these kind of unpleasant events,” Fulkerson said. “We may not have had the growth we would like to have had, but we have not had a slowing down of our occupational or net profits returns.”

Owensboro and other cities around the state have also avoided pension problems like the one facing Lexington, in part because they were required to join the state pension system while Lexington and Louisville were given a choice.

While Lexington still operates its own pension system for police officers and firefighters, Owensboro and other smaller cities were moved years ago into the County Employees Retirement System. 

Lexington must overcome a $20 million gap to meet increased contribution rates approved by their pension’s board this week, but Owensboro and other cities received a contribution rate decrease from the state for this fiscal year. 

That decrease was included in House Bill 1 passed in this year’s legislative session, and will mean a $500,000 savings for Owensboro this fiscal year in its annual pension expenses, Fulkerson said.  

Read more about Fulkerson’s take on the city’s finances tomorrow in the Messenger-Inquirer.

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