Presentations on LFUCG’s personnel budget and ad valorem taxes
Update:
The Budget, Finance and Economic Development Committee received an overview of Ad Valorem taxes, and the different options they have to choose from when setting the tax rates for next Fiscal Year. Director of Budgeting Melissa Lueker presented to the Committee for information only and no action was taken at this meeting, though the Urban County Council will be setting this rate upon their return from Summer Break in August.
The Budget, Finance, & Economic Development (BFED) Committee will meet this week and hear a presentation from Commissioner of Finance Erin Hensley on how the city budgets for personnel. Here are some things of note from the presentation:
LFUCG has 3,289 approved full-time positions
49% of the City’s budget goes toward personnel costs
The City never budgets to be 100% fully staffed; instead, they budget for a certain percentage of staff positions filled by taking into account a division’s history of staffing shortages and turnover
Benefits such as healthcare, pension, and others add another 50%-70% of salary costs to a personnel budget
The presentation will also cover what different money sources pay for workers, and other factors in personnel budgeting. You can view the entire presentation here.
In the same meeting, BFED will also hear from Melissa Leuker, Director of Budgeting, about Ad Velorem taxes. Ad Valorem taxes are local taxes on real estate, machinery & equipment, motor vehicles, boats, personal planes, or agricultural products. Almost all of the revenue LFUCG receives through Ad Valorem is redistributed to a number of agencies in Lexington, including the Library, Cooperative Extension, and others. There are two categories of Ad Valorem taxes that go to LFUCG - the General Fund and the Urban Services Fund (refuse collection, street lights, and street cleaning).
Council must begin the processes on setting the next fiscal year’s ad valorem tax rate. They will be presented with four options:
Keep the rate the same as last year.
Set a rate that would provide the same amount of revenue as the previous year from existing property; any additional revenue would only come from new property that was not taxed the previous year.
Set a rate allowing for 4% revenue increase.
Set a Cost of Services for the Urban Services Fund that would generate enough revenue to fully pay for those services.
Last year, Council voted to set a rate that would generate a 4% revenue increase, which actually required reducing the tax rate. By Kentucky state law, any ad valorem tax rate that generates more than 4% revenue is subject to a recall vote from the public. There is no recommended option specified in the slides of the presentation. Last year the Mayor’s Administration recommended the 4% increase option.
For more information on this tax, you can visit the Fayette County Sheriff’s website, or view the presentation.
The Budget, Finance, & Economic Development Committee will meet on Tuesday, June 27, 2023 at 1:00 pm in Council Chambers. You can attend in person or watch live on LexTV.
