Freshman Louisville Metro Councilman Jerry Miller, R-19, is continuing a call to cut neighborhood funds to help fill a $22 million shortfall in the city’s budget, despite vocal opposition from council Democrats.
For the past few months, council discretionary spending has come under scrutiny after it was revealed that Councilwoman Judy Green, D-1, was implicated in circumventing council rules by rerouting funds through a non-profit group. In response, Council President Jim King, D-10, ordered an audit of all discretionary spending for the past two years to spur any potential rules changes to distributing funds.
Miller immediately asked Mayor Greg Fischer to cut the discretionary account by more than half in fiscal year 2011-12, citing budget woes and public concerns with a lack of oversight. Since then a handful of council Democrats have approached him, saying Miller lacks the experience to make that recommendation.
“Some expenditures have been very good for the community, but in a very tight budget I think we all have to contribute to solving this problem,” says Miller. “And if each councilman can cough up $40,000 out of their $200,000 of funds, I don’t think that’s an unreasonable sacrifice.”
Totaling $4.5 million in the overall city budget, each council member is allotted $75,000 in Neighborhood Development Fund that can be spent on improving the district in addition to a $100,000 Capital Infrastructure Fund for building projects. Through the appropriations committee, however, council rules allow members to transfer money from the capital account pot to the neighborhood fund, which doesn’t have as many rule restrictions.
Political observers have noted the potential for abuse and have criticized the spending as a “re-election slush fund” for incumbents. Earlier this month, the Courier-Journal‘s editorial board called on the council to drop the funds, citing that other similar-sized cities function without them.
Council Democrats, however, have publicly defended the practice as much needed funds for their urban and often poorer districts, which are used by external agencies and for emergencies.
“Several members of our caucus dispute the need for cutting out discretionary funds because there are just so many uses that have been coming for NDFs over the years that Councilman Miller may not be aware of them,” says Democratic caucus spokesman Tony Hyatt. “It’s very easy to say if you’re just coming into office that they should just be cut, but he should at least go through the budget process and understand where the NDFs play before deciding it needs to be cut.”
Despite the push back, Miller believes the public wants assurances that the funds are being handled properly given the potential for abuse, such as the ongoing scandal involving Councilwoman Green. A 2010 audit found, for instance, that the city’s Office of Management and Budget had no system for monitoring the funds or any way to make sure recipients were properly spending the money.
The city’s chief financial officer has recommended that all discretionary spending be reviewed by the Office of Management of Budget, which would delay how quickly non-profit groups receive funding, but would increase oversight. Even with such rule changes, the council must also make sacrifices in tough budget times and take part in the cost-cutting measures, says Miller.
“My thrust is number one we’ve got to improve accountability on it. Everyone agrees that accountability needs to be improved in terms of discretionary funds,” he says. “But there has to be some fiscal responsibility and sacrifice demonstrated by the council during this shortfall.”
Fischer said he was surprised with the lack of accountability and a spokesperson with the mayor’s office told WFPL last month that the mayor was considering Miller’s request. However, when asked about the proposal again Friday, a Fischer spokesperson said the decision would be left up to the council.