City And County Leaders Want More Local Control Over Taxes, Pensions

FRANKFORT, Ky. – What do Kentucky cities and counties want out of the upcoming legislative session?

The short answer is more money.

Whether that be in the form of new taxes or pension changes, officials with both the Kentucky League of Cities and the Kentucky Association of Counties say they need more control over possible revenue streams.

Bill Dieruf, president of the Kentucky League of Cities, said the organization wants lawmakers to separate the pension fund for city and county employees, CERS, because he feels like the pension fund could bring in more investment returns if it were its own entity.

“The cities and counties have worked diligently to find the dollars. That comes at a cost,” Dieruf said. “It comes at a cost that could cause the cities and counties to be not around or not perform the duties they’re required to as a city or a county.”

The League of Cities has been advocating for this for years but lawmakers haven’t signed off on it.

Another priority for the League of Cities is more control over taxes. They want cities to have the ability to set their own taxes on retail sales and restaurants.

Some cities can already set a restaurant tax, like the city of London.

Mayor Troy Rudder said the extra revenue, estimated at $3 million a year, has been a blessing.

“It has allowed us to build parks for our people. It has allowed us to invest in our future,” Rudder said. “I don’t know a single city in this commonwealth that wouldn’t benefit from the restaurant tax. It changed the whole direction of our city.”

Many of the priorities for the Kentucky Association of Counties also revolved around more tax revenue, including a gas tax for road and bridge repairs.

“We know this is a tough vote. Anytime I vote on a revenue (stream) or a tax, I know I’m going to hear about it. I know you’re going to hear about it,” KACo President Judge Gary Moore said. “It’s a tough vote, but I think it’s not as tough when the residents see the benefit of what they’re paying for.”

Moore said he would also like to see a tax on electric and hybrid vehicles since they use the same roads, but don’t have to buy gas nearly as much as drivers with more traditional vehicles.

KACo also wants lawmakers to allow local governments to pass their own sales tax, saying they’re too dependent on income tax revenue, but they also want some help with county jails.

53 percent of people who responded to the organization’s poll say jails are the largest burden on their budgets.

Lawmakers questioned how to help with that without giving the state more control, and KACo president-elect Judge Reagan Taylor said more resources could be dedicated to drug treatment since 80 percent of inmates are in jail on drug charges.

“I would put that at No. 1, of treatment, because I feel like the treatment has a return on investment,” Reagan said. “I don’t ever want it to come across that we’re just looking for funding, because just throwing money at something is not always a good solution.”

According to KACo, Kentucky has 4,000 more inmates in jail than it has beds, so closing that gap will be vital to helping county jailers.