‘Thorough’ or ‘predetermined’? Inside Louisville merger commission's controversial final report
A commission reviewing the successes and failures of Louisville’s 2003 city-county merger recently released its final report. It includes recommendations that could dramatically change local elections and how city services are distributed across the Metro.
The Comprehensive Review Commission was created by the Republican-dominated General Assembly last year when it approved House Bill 314. While there was some support for the commission, Louisville’s Democratic leadership largely opposed the bill. The commission had a mandate to examine the accomplishments and insufficiencies of Louisville’s tax sources, distribution of services to residents and the relationship between Metro Government and the more than 80 independent cities in Jefferson County.
Under HB 314, the Comprehensive Review Commission was to conduct “a thorough and searching review” of Louisville Metro services 20 years on from the 2003 merger. But some elected officials and residents argue the data underlying the commission’s work was misleading. They also say the final report reflects the “predetermined outcome” of Republican lawmakers.
In recent weeks, after a series of votes, the 15 commission members passed 20 recommendations.
The commission is asking the General Assembly to pass a new state law to make Louisville’s mayoral and Metro Council races nonpartisan. Although some members questioned whether the panel had authority to make such a suggestion, it was approved 11-2 with two members not voting.
Earl Jones, the commission’s co-chair, said he’s seen local, state and national politics become more divisive in recent years.
“I think that there are benefits to having some decisions being taken without regard to party,” he said. He voted in favor of the proposal.
Other recommendations include:
- Creating a new state law requiring members of Louisville’s various boards and commissions reflect the “geographic and political diversity” of the population
- Asking the Louisville Metro Police Department to evaluate how it can “provide adequate policing across the entire county”
- Creating a state-level affordable housing tax credit to encourage development of new multifamily and single-family housing
- Asking the General Assembly to put forward a constitutional amendment allowing local governments to levy new kinds of taxes
The report, along with the full list of recommendations, is available here.
Commission members spent a lot of time on emergency services.
Louisville Metro EMS provides emergency medical care and transportation to residents throughout Jefferson County. Since merger, communities outside of the Watterson Expressway have formed their own fire districts that levy taxes to provide additional EMS and firefighting services.
Republican state Rep. Jason Nemes, who sponsored HB 314 and co-chaired the commission, argued during a meeting earlier this month that this system amounts to double taxing of rural and suburban residents in Louisville Metro.
“The people who live in those areas pay Louisville Metro taxes that go into the general fund to pay for Louisville EMS,” he said. “They’re not getting those adequate services from Louisville EMS, so they had to double up on their payment.”
Marianne Butler, a former Metro Council member appointed to the commission by then-Mayor Greg Fischer, disagreed with proposed changes to the service from Nemes and Republican state Rep. Ken Fleming. Butler said Louisville Metro EMS is limited only by having too few personnel.
“We need to help them get staff and staff that stays,” Butler said.
Jody Meiman, executive director of Emergency Metro Services, also explained during a recent meeting that Louisville Metro EMS responds to calls outside of the urban core, just as suburban first responders serve calls inside the old City of Louisville. He said MetroSafe, Metro’s centralized emergency response center, assigns whoever is closest.
Despite that, the commission recommended making the old city boundaries, also known as the Urban Service District, the official service area for Louisville Metro EMS. They want the additional property taxes paid by Urban Service District residents to fund that service entirely by 2030.
The recommendation was based, in part, on data showing that suburban EMS were responding to more calls in the Urban Service District compared to how many times Louisville EMS was responding to outside the city’s core.
In a statement Monday, Mayor Craig Greenberg thanked the commission for recommending local tax flexibility, new development incentives and more investment in downtown. But Greenberg said he opposed changes to Louisville Metro EMS.
“This proposal would raise taxes for thousands of Louisville families and further fracture emergency services in the Metro region,” he said.
The commission’s recommendations relied on data and analysis provided by University of Louisville economics professor Paul Coomes and geographer Matthew Ruther.
They presented estimates that showed roughly 75% of Louisville Metro’s revenue from property taxes was paid by people living in suburban cities or in unincorporated areas.
Louisville Metro also collects payroll taxes based on where the work is done. That means if someone works downtown but lives in Southern Indiana, they pay payroll taxes to Louisville.
Coomes estimated that roughly 40% of Louisville Metro’s payroll tax revenue came from people living outside of Jefferson County. Of the rest, which comes from local residents, he said people living in suburban cities and unincorporated areas generated almost three times as much as Urban Service District residents.
For Nemes and many other commission members, the takeaway was clear: In an email to a resident who disagreed with his conclusions, Nemes said the suburbs are subsidizing services for urban residents.
“Not only are we in the suburbs paying too much in taxes that goes to the city, the services that we get are so bad that we have to set up secondary governmental programs to provide the services that Metro is supposed to provide but does not,” Nemes wrote in the email, which the recipient shared with LPM News.
But critics of the commission and its report argue the researchers’ data painted an incomplete and inaccurate picture.
Michael Schnuerle, who was Louisville’s Chief Data Officer from 2016 to 2020, outlined his issues with the analysis in July. Using publicly available data from the Metro Revenue Commission, he found that many urban areas actually generate more tax revenue per person than suburban areas for some local taxes, like payroll taxes. The payroll tax, formally referred to as the occupational license tax, accounts for more than half of Louisville Metro’s annual revenue.
Schnuerle also argued that numerous case studies across the country conducted by the planning consultant Urban3 found it’s more cost-effective to provide services — like police, road paving and libraries — in urban areas than in less-dense suburban areas.
“If you’re trying to run a government like a business and you’re getting tax revenue from your residents and spending that revenue, you have to look at the expenses as well,” Schnuerle said. “That’s not something [the commission] looked at.”
In response to questions from LPM News, Coomes said he disagreed with Schnuerle’s assessment. He said his analysis found that residents and businesses inside the Urban Services District pay less in all taxes combined than residents of suburban cities. They did pay more taxes per person than residents of unincorporated areas, however.
Coomes said “the density argument is a valid one,” but he feels it's more complicated than critics make it seem.
“We found the USD accounted for half or more of expenditures on the very expensive basic public services (police, EMS, corrections, TARC),” he wrote. “So there may be efficiencies but there are a lot more costs to cover per capita.”
The final report did not include any of the data Coomes produced. Currently, that information is only available as presentations on the commission’s website.
“The commission made a decision months ago not to put up the very large databases we analyzed (the raw data), as our charge was to detect patterns to inform policy, not to be a data warehouse,” Coomes said.
What comes next?
The Kentucky General Assembly could act on some of the commission's recommendations, either by passing new legislation or putting a referendum to voters. Louisville Metro would have to adopt changes for others.
The problem with that is that many of the city’s elected officials, the vast majority of whom are Democrats, opposed House Bill 314, which created the commission. Some have also been wary of the commission's motives and conclusions.
In a recent interview, Metro Council President Markus Winkler said he thinks the commission started from an “us versus them” framing that is “rooted in the politics of division.”
“I don’t know that anything good comes of that,” he said.
Winkler, a District 17 Democrat representing a suburban district in the East End, said he disagreed with the commission’s conclusion that Louisville’s urban core is not self-sufficient.
He also said he saw the process as political from the start.
Winkler pointed to the fact that House Bill 314 also made “substantial changes” to Louisville’s merged government — such as paving the way for forming new independent cities for the first time in 20 years.
“Any time you pass a law that sets the rules and then forms a commission to study what the rules should be, it’s hard to see that as anything other than a predetermined outcome already being in the cards,” Winkler said.
District 4 Metro Council Member Jecorey Arthur, who was a member of the Comprehensive Review Commission, also disagreed with the findings. Arthur is an Independent representing the Central Business District and surrounding neighborhoods.
In an Aug. 18 interview on the Citystate podcast, Arthur said the commission didn’t get much input from Metro Government officials at its regular meetings.
“There are a lot of comments made about the data, a lot of anecdotes about the data, and the people who actually provide those services … they should be in those commission meetings correcting the record,” he said.
Arthur also criticized Louisville’s Democratic leadership, including Mayor Craig Greenberg, for not taking more interest in the commission’s work and pushing back on recommendations he thinks could harm residents. He called it “political negligence.” Arthur said he announced his decision to drop his affiliation with the Democratic Party during a call about the commission's work.
“I got on the call late and I heard the mayor’s staffer say, ‘Well, we don’t know how much we want to get involved,’” Arthur said. “And I said, ‘What are you talking about?’”
Kevin Trager, a spokesperson for Greenberg, said the mayor’s administration was “very involved in communicating with commission members to make our positions clear on each of these issues.”
Greenberg wrote to the commission on Sept. 1, two weeks before the final report was due, asking members to “consider the challenges and opportunities” facing Louisville. In Greenberg’s view, the city’s most pressing problems are public safety, a need for more tax revenue options and revitalizing downtown, which he said could rebalance the populations of Louisville’s urban core and the fast-growing suburbs.
“If the state makes legislative changes that reduce revenue from the city’s general fund, we will have to cut services and leave critical investments on the shelf,” Greenberg wrote. “We cannot afford to do either.”
At the time, Greenberg said he was hopeful the Comprehensive Review Commission would be a partner in helping Louisville move forward.