Greg Fischer starts final term with budget hole and skeptical Metro Council

At the outset of his third and final term in office, Louisville Mayor Greg Fischer may be facing his toughest political challenge — one that could leave the city to suffer serious service cuts for the foreseeable future.

Fischer, a Democrat, came out of the fall election touting the city's economic renaissance and lower crime rate, a formula that led to a more than 25-point victory over Republican Angela Leet.

But now, rising pension costs — attributable to years of the state's fiscal negligence — have come home to roost. And Fischer must contend with a more skeptical Metro Council, made up of many government rookies who are hesitant to pick up the administration's urgent call for a tax hike to fill a $35 million budget hole.

"How the public perceives the response of a mayor to a pressing problem will be an important part of his or her legacy," said Steven Koven, a University of Louisville professor who studies urban and public affairs.

"Amicable or contentious resolution of the budget situation here in Louisville could set the table for the remainder of the mayor's term in office," Koven said.

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Fischer, who first took office in 2011, considers coming out the Great Recession and beating back a record homicide rate as two of his greatest feats.

The mayor acknowledges, however, that the pension problem will be difficult to overcome, especially with the new council's inexperience on budget matters.

"This is a significant challenge because it really, I think, impacts the future of our city," Fischer said. "I face no joy in saying we need to raise taxes. But I face less joy in cutting basic city services that citizens deserve."

The mayor's office had hoped to triple the insurance premium tax to deal with the shortfall. Instead, after hearing from angry constituents, the council's Budget Committee passed a counterproposal that would double the tax.

Such a move, if approved by the full council on Thursday, would force the Fischer administration to deal with $15 million in cuts in the upcoming 2019-20 budget. City officials said that will increase to about $20 million more in cuts for the coming years.

Fischer said it would mean fewer police officers on the streets, shutting down two fire stations and closing public pools, community centers and other vital services. He said the council hasn't specified what agencies it wants to slash.

"Cuts have consequences," Fischer said. "So, you can cut today, (but) the question is, when your house is burning tomorrow and there's a reduced response — is that OK?"

Related:What could a Louisville tax hike on insurance premiums mean for you?

New council, new problems

The mayor's caucus of allies at City Hall shrank after last year's election brought eight freshmen to Metro Council.

But some veterans — Democrats such as Jessica Green, Barbara Shanklin and Brent Ackerson — have also been critical of how Fischer is handling the shortfall.

City lawmakers have faced the wrath of constituents at town hall meetings, as well as phone calls and emails from people upset by the prospect of their insurance premiums going up.

Ackerson, D-26th District, pointed out in a statement Friday that in years past when the city faced large budget shortfalls, it accepted uncomfortable cuts, layoffs and furloughs for public workers without raising taxes.

In 2008, for instance, Mayor Jerry Abramson dealt with repeated budget shortfalls because of the national recession. He avoided raising fees or taxes, but made several unpopular decisions to erase the deficits.

​​​​​​​Mayor Fischer:Council tax counterproposal is 'far from a perfect solution'

Previously:Fischer tax's counter-plan clears panel in minutes, setting up battle

He furloughed city workers and shut down certain government offices for four days. He also combined public safety recruitment classes, closed library branches and community centers one day a week and cut funding for nonprofit groups.

"At present, (Fischer) and those who support blindly going forward with a tax increase are refusing to acknowledge reasonable cuts and alternative revenue sources that could be available if we get to work," Ackerson said. "As we all know, once a tax is levied, it rarely if ever goes away."

Political observers note that Fischer is being more bold because he does not have to face Louisville voters again. But those same individuals point out that council members, whether rookies or veterans, are being asked to swallow a large tax pill.

"That is not a fun way to lead," said Tom Owen, a historian who served a combined 22 years on the old Board of Aldermen and Metro Council.

"Mayors and council people love to go to ribbon cuttings, and I think the mayor is wanting to preserve for the city and himself a term where there’s a dynamic, and not just paying bills, for crying out loud," he said. "Nobody one wants to lead a city that's in that kind of situation."

Owen, a Democrat, said new council members may be thinking about their political life after Fischer leaves office.

"They just got elected, and you'll never be more popular, and if you vote to support an additional tax of any kind, your popularity is going to take a sting," he said.

Fischer said he feels bad for the eight new council members who are being given a weighty decision so early. He said he hopes his team has conveyed the urgency for additional revenue, and suggested the new class have faith in their colleagues.

"They need to look at the bigger picture of how our city is doing ... and we're just at a time right now where difficult choices need to be made," Fischer said.

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But Kelly Downard, a retired banker who served on the Metro Council until 2016, said the friction represents more than new members learning about the budget process. He said the mayor's leadership style and failure to communicate with council members and the public earlier about the need for more revenue hurt his credibility.

"When (Fischer) first got in, he wanted to work with everybody, get everything done and not cause any friction," Downard said. "Now, he just doesn't seem to care."

Downard, a Republican, said the council turning down Fischer's initial tax hike plan mirrors how it bucked Abramson more during his final term. He said Democrats and Republicans joined to pass several reforms on transparency and ethics despite objections from Abramson, who was known fondly as "mayor for life" in Louisville.

"Jerry started off the same way Greg did: 'Oh, let's all get along, we're going to get together and all agree on everything,'" Downard said. "And after that second term, the mayor starts thinking, 'I'm smarter than they are.' Maybe he is right, but his staff becomes convinced their job is to get around the council and not work with the council."

In the community, opponents of the tax plan echo that Fischer's rollout wasn't taken seriously, given that he was boasting about the city's economic growth until only recently.

Resa Camoriano, president of the Louisville Tea Party, said the city should have been more responsible with taxpayer dollars leading up to now. She pointed out, for example, how the city backed using a $30 million bond to help finance the Louisville City FC soccer stadium in Butchertown.

"Obviously, he waited until after the election to find this problem," Camoriano said.

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But other local leaders said they are equally worried that without more revenue, the cuts will disproportionately impact low-income residents and other marginalized communities.

"When we look at city services utilized by people who desperately need them, we don't want to see any gap in those services at all," said Chris Hartman, executive director of the Fairness Campaign, and LGBTQ advocacy organization in Louisville.

Koven, the U of L professor, said with a Thursday deadline to pass the insurance tax in time for implementation this year, Fischer and the council must quickly show the community they are working together.

Thursday's vote is a test of a divided city government, which, he said, is often a recipe for inaction or an action based on political pressure and misinformation.

Koven said the impact of what happens this week could go beyond Fischer's final term, and could have ramifications in the 2022 election or beyond.

"Some potential candidates may be reluctant to run for office if they believe it is impossible to be seen as successful," he said. "There always seems to be people, however, who believe they can fix any situation more effectively than others."

Reporter Phillip M. Bailey can be reached at 502-582-4475 or pbailey@courierjournal.com. Support strong local journalism by subscribing today: courier-journal.com/philb.