Louisville Mayor Greg Fischer has unveiled a plan to fill the current budget deficit using a variety of department cuts and a settlement from Insight Communications.
The city is facing a $12 million shortfall and officials have been clamoring to fill the hole without layoffs or cuts to services. The Fischer administration will use $6.8 million in savings across city departments and a one-time $3.5 million settlement from Insight.
The money is part of an agreement on Insight’s contract to operate in the city. The city spent the last year negotiating the new contract. Insight has agreed to give the city the payout and preserve all existing services.
“The timing of the settlement is obviously fortunate, keeping the city from having to take even more significant measures to reduce services to close the deficit,” says Fischer. “However, the settlement is just a one-time deal and we still have to address our long-term structural imbalance in which expenses are exceeding revenues.”
The agreement will be transferred to Time Warner Cable, which is purchasing Insight. Time Warner will negotiate a new contract with the city. The mayor hopes to preserve a program that provides free cable to government buildings and schools. Fischer also plans to work with Time Warner to keep Insight’s call center in Louisville.
In addition, the mayor will eliminate his $41,000 discretionary fund for the next two years. Fischer says he will ask city lawmakers to cut their budgets over the next two fiscal years as well.
“The budget reduction plan that we’re putting forth also asks the Louisville Metro Council to contribute by reducing its budget $142,000 for the balance of this years as well, which represents a 2.5 percent cut for them. It’s similar to what we’re asking other folks to do,” he says.
The primary cause for the city’s budget shortfall is low occupational tax revenue. The income is growing, but it’s a slower gain than was previously expected.