Calling a proposal to increase monthly bills for Louisville Gas & Electric Co. customers a backdoor tax, Louisville Metro Councilman Ken Fleming says the honeymoon for Mayor Greg Fischer is coming to a close.
The mayor is currently drafting a city budget facing a $22 million deficit, but city lawmakers are beginning to criticize the administration’s cost-cutting and revenue raising measures.
On Monday, the budget committee will vote on the city’s new franchise agreement with the utility company, which hasn’t been renewed since 2003. If approved, the plan will increase the cost of natural gas by three percent while generating $5.4 million for Metro Government.
“I think that this is going to cause a raised eyebrow in terms of what Fischer is really trying to do to this community,” says Fleming. “He’s turned down a creative way in terms of help creating jobs by this (net operating loss) and now he basically wants to tax us through this license fee on the families of this community.”
Council members on both sides of the aisle have criticized the franchise fee as unfair to the majority of residents because it wouldn’t apply to residents who live in smaller, unincorporated cities such as St. Matthews and Seneca Gardens.
That leaves around 145,000 people who would not be affected by the administration’s proposed franchise fee.
The mayor’s office argues that city’s current agreement with LG&E generates only about $500,000 in revenue each year, which is much less than other municipal agreements. Also, the increase would only raise cost by $1.50 a month on average.
However, it’s expected that budget committee members will vote against the mayor’s plan due to the unless a compromise can be reached.
“The way it’s trending, I believe it will go down. They have yet to provide a solid case to justify it,” says Fleming.
The committee will hear testimony from LG&E officials at Monday’s hearing.