Louisville Metro Council approves $1.3 billion budget for 2023. Where the money is going

LOUISVILLE, Ky. — Louisville's $1.3 billion budget for 2023 is now set, as Metro Council members on Thursday unanimously approved the spending plan featuring no major cuts or significant changes from what Mayor Greg Fischer proposed in his final year in office.

Fischer pitched in the spring the $1.3 billion budget for fiscal year 2023 featuring $715 million in general fund spending and $343 million in capital funds for various projects.

Thursday's votes for the operating and capital budgets were both 26-0, with members taking turns during the meeting to commend the bipartisanship work shown during the budget process.

Some of the council's changes to Fischer's initial proposal included upping the spending for road repaving, park improvements, library book purchases, homelessness outreach and mental health resources at Louisville's jail.

Earlier: How Metro Council may tweak Louisville's budget

Metro Council also deferred some local spending on matches for federal infrastructure projects that haven't materialized, cut the number of new city positions in the Office of Management and Budget the mayor's office wanted to add and paused some "non-essential" spending until December.

That is when updated financial projections should be available that may show whether Louisville could face multimillion-dollar budget deficits in 2024 and beyond, a possibility given uncertainty over inflation and fears of a potential recession.

Council members noted initial projections of a $70 million shortfall in 2024 have since become rosier, though exact figures for the future remain unknown.

In light of that, the mayor and council set aside $11 million for the city's Rainy Day Fund and added $15 million to cover future budget shortfalls.

"The budget that Metro Council approved tonight renews our commitment to public safety and invests in our core values — lifelong learning, health and compassion — with a focus on equity and fiscal stability," Fischer tweeted.

The new fiscal year begins July 1.

Here are some highlights of Louisville's 2023 budget.

More money for police, fire and violence prevention

Crime and safety have been on the minds of Louisville politicians and residents in the past few years amid record homicide levels and a man even punching Fischer last weekend at Fourth Street Live.

Metro Council members agreed with the mayor's proposal to increase the budgets for various agencies, including the Office for Safe and Healthy Neighborhoods, Louisville Metro Police and Louisville Fire.

LMPD will have a general fund budget of nearly $210.5 million in 2023, a roughly $25 million increase over its $185 million allocation in 2022. Other receipts and funding sources will boost LMPD's budget to over $220 million.

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The department's budget includes funding for three recruit classes as part of a goal to reach 1,200 officers, including laterals and rehires, by the end of fiscal year 2025, and $6 million is set aside to acquire land and design plans for a new LMPD training facility.

LMPD leaders have said they are short roughly 300 officers, with June data listing 1,017 sworn personnel.

While the officer shortage may continue into 2025, Fischer said about $4.5 million for the relatively new 911 deflection program should help reduce police responses in situations involving, for example, non-violent mental health issues.

The budget also has $780,000 to demolish the LMPD headquarters at Seventh and Jefferson streets. Metro Council approved $20 million in December to purchase and renovate the AT&T building at 601 W. Chestnut St. to house LMPD and other city agencies.

Money from Neighborhood Development Fund accounts and other discretionary dollars given to each council member will also help cover some LMPD overtime for things like a "Holiday Shopping Robbery Reduction" at Jefferson Mall and other shopping outlets as well as "Violent Crime Details" within the Preston Highway corridor between Fern Valley Road and Outer Loop and a hotel corridor in the 2900 block of Fern Valley Road.

A council amendment to the budget also says LMPD Chief Erika Shields is "required to negotiate a contract with Churchill Downs to adequately cover police overtime during the Derby events, Thurby, Oaks and Derby," with expected overtime "restricted and limited to the amount agreed upon by Churchill Downs."

Louisville Fire gets nearly $84 million for 2023, a bump over its $72.4 million allotment in 2022. The budget includes $1.4 million for a burn building to train firefighters and funding for a recruit class to start in May 2023.

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After eight people died while in Metro Corrections custody from last November to this March, and the jail's previous director retired amid pressure to step down, Metro Corrections gets a general fund allocation of roughly $57 million in 2023, a roughly $2 million bump up from 2022.

Metro Council members also amended the budget to include $150,000 for additional "mental health resources" at the jail, which saw several suicides among the recent in-custody deaths.

Metro Corrections also receives $3.7 million in capital investments under the new budget, including an expansion of camera systems, monitoring equipment for observations of high-risk inmates and more body scanners at entrances.

The Office for Safe and Healthy Neighborhoods is getting about $7.3 million in general funding "to continue restorative justice and youth violence prevention programs, as well as provide hospital- and community-based youth intervention," per the mayor's budget pitch.

OSHN received a general fund budget of about $4.4 million in 2022, with the office attempting to bounce back from 2019 cuts that were followed by triple-digit homicide totals in 2020 and 2021 and hundreds of additional non-fatal shootings.

City officials have noted that while homicides are still at alarming levels this year, non-fatal shootings and overall violent crime have dropped from 2021 into 2022.

Helping with homelessness and affordable housing

Fischer noted earlier this year the 2023 budget includes $10 million for the Affordable Housing Trust Fund, bringing the investment during his 12-year term to $106 million.

The budget also includes $3 million in down-payment assistance to help increase homeownership among low- to moderate-income households and $3.4 million to repair and maintain homeownership in low-income areas.

This investment follows the roughly $100 million in federal American Rescue Plan funding that Metro Council members approved last year for affordable housing and homelessness programs.

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Metro Council members amended the budget to add $1 million to expand Goodwill's Another Way program countywide.

The program, which had $279,000 in Fischer's initial pitch, started as a pilot in 2021 and offers the homeless in high-traffic areas the chance to get off the streets and work while receiving a stipend and access to Goodwill's services.

The amended budget also includes $100,000 for more homeless outreach specialists in downtown Louisville and $220,000 for outreach in underserved areas, particularly those outside the Watterson Expressway.

Where the streets have no potholes

Fischer had initially pitched about $22 million to cover road paving and sidewalk repairs in Jefferson County, but Metro Council members felt that was not enough.

So their amended plan gives over $30 million for road repaving and $1 million for a new "alley restoration plan" they touted in a news release as "the first significant investment in alley repaving in decades."

"Traffic calming efforts," which include things like speed bumps to slow down vehicles and protect pedestrians, get $500,000, and council members said their proposal has $3.25 million for sidewalk repairs spread across all 26 districts.

Money is in the budget to also move forward with converting some one-way streets to two-way routes, widening a portion of River Road and redesigning major thoroughfares like Ninth Street and Broadway.

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Higher pay for county attorneys, public defenders

Among the numerous city staff who have sought pay raises in the past year amid a competitive labor market are county attorneys and public defenders.

The Jefferson County Attorney's Office, which handles civil, criminal and child support cases, told council members during this year's budget hearings that boosting starting pay for full-time attorneys who recently passed the bar from $45,000 to $55,000 a year would help retain staff who otherwise go to better-paying law firms or companies.

Council members granted that request to raise starting salaries as part of the office's roughly $14.2 million budget, and the office will give "proportional" raises to 33 prosecutors who have more experience than the new attorneys.

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In addition, 14 support staff who assist attorneys with paperwork and various other tasks will see their pay increase to $17 an hour.

And to help retain younger attorneys, the office requested $92,000 to give raises to seven of its lowest-paid civil attorneys.

Public defenders, who represent indigent adults and juveniles in court, also have started at $45,000 annually in Louisville.

Chief Public Defender Leo Smith told Metro Council members in May the pay rate was making it difficult to attract and retain staff in his office. The approved budget will make pay raises possible, Smith told The Courier Journal on Thursday, though he did not immediately provide more specifics on salary increases.

“We are pleased and grateful that the Metro Council accepted our budget proposal and honored its funding responsibility under KRS Chapter 31," Smith wrote in an email.

Smith and his office also await a legal ruling on whether public defenders in Louisville can unionize amid complaints from some that they face "untenable working conditions."

External agency funding

Various nonprofit and service organizations in Louisville, such as community ministries and groups focused on youth and the arts, receive more than $8.9 million in the 2023 budget through the External Agency Fund.

The city's website notes these organizations offer "programs or services that advance the long-range vision and goals established by Louisville/Jefferson County Metro Government" and make "a measurable positive impact in the community" while being "good stewards of taxpayer dollars."

Reach Billy Kobin at bkobin@courierjournal.com.

This article originally appeared on Louisville Courier Journal: Louisville Metro Council approves 2023 budget in mayor's final year