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The Lane Report

Comments on the Mayor's
Propossed FY 2006 Budget
July 1, 2005 - June 30, 2006

Mayor Teresa Isaac recently presented her proposed budget to operate the Lexington/Fayette Urban County Government for the next fiscal year.

Between now and the end of June, the Urban County Council will review and modify the Mayor's fiscal recommendations and adopt a final budget. One of the primary responsibilities and duties of the Council is to set priorities for our local government and to establish levels of revenue (taxes, fees, grants, and service changes) and expenditures (appropriations for specific government services).

During the next 30 days, councilmembers will be meeting with the heads of various departments to review the services provided, number of employees, and budget recommendations. Until investigation and analysis of the proposed budget has been completed, it is premature to comment on the Mayor's expenditures by line item.

However, on a "macro overview" approach, it may be helpful for Lexingtonians to compare revenues and expenditures that were approved by the Council for this fiscal year and the expenditures proposed by the Mayor for next fiscal year.

General Fund Expenditures

*Some insurance costs are allocated to Administrative Services in FY 2006.

** Lextran received $3,404,020 in FY2005; effective FY2006 Lextran receives ad valorem tax revenue ($11 to $12 million) based on property valuations. This new and separate tax is not included in the FY2006 general fund budget.

In addition to LFUCG general fund revenues and expenses, the Urban Services Districts Fund and other funds generate additional revenues. After adjustments for interfund transfers, the estimated net expenditures of all LFUCG funds is:

Your local government is spending over $1 million each day. The annual expenditure is approximately $1,445 for every man, woman and child living in Fayette County.

Initial comments on the Mayor's FY2006 Budget

As I mentioned at the beginning of this column, it remains early in the evaluation process to make comments on specific line items in the budget. As a fiscal conservative, I am concerned about these basic issues -

Although the mayor projects $37 million in additional revenues and spending in the FY 2006 General Fund, no allocation has been made to save some of this 17% increase in revenue. I strongly believe that a portion of surplus funds at year end should be saved in a "rainy day" account. This will protect the ability of our government to operate without significant budget cuts, service reductions, or tax increases during the next economic downturn.

Our local government must operate more cost effectively. Rather than continuing to add more employees (the Mayor is recommending 177 new hires), I recommend that LFUCG set goals to streamline its organization and to reduce excessive management and personnel. These changes can be made by attrition. Layoffs are not being proposed.

Some services of local government could ideally be outsourced to local businesses. Outsourcing is an excellent way for the LFUCG to use competitive market forces to obtain the lowest costs for services and to provide seasonal employees. No proposal to outsource services has been presented by the Mayor at this time.

Your comments and suggestions are always appreciated.




If you would like to contact Ed Lane he can be reached via at EdLane@LFUCG.com ; and by letter at 200 East Main Street, Lexington, KY 40507.

Councilman Ed Lane represents the 12 th District on Lexington Urban County Council. He is the owner of a commercial real estate services firm and publishes a statewide business magazine.

“I want to conservatively spend our tax dollars,
eliminate waste, and bring sound business ideas
to local government.”

To contact Ed Lane's 12th district council offices, e-mail him at edlane@lfucg.com.