I moved to Kentucky in 2008 when the economy crashed. Our family decided it was time for us to agree to, and live by, a budget in order to avoid our own fiscal cliff. My husband recommended each of us put our receipts in a jar.
At the end of the month, we would painstakingly open the lid and review each receipt to match our credit card statements, and to see how we are doing in meeting our budgeted expenses. By careful examination, we discovered unauthorized charges and were able to get the money back. We also realized that certain months we had to spend less in order to stay within our budget. We have five college tuitions and aging parents. Planning for the future, and accounting for it today, is our reality.
Families all across Kentucky have to do more with less. We are all tightening our belts, and so should government. We need to get serious about government spending in Kentucky, and that includes the $2.7 billion dollars special districts spend every year, or the estimated $1.3 billion of our money they hold in reserves. Special districts spend more than county governments in all but three counties. They provide public services such as fire districts, libraries and roads.
No elected official — not one — is directly responsible for approving or overseeing this money! No elected official is responsible for approving special district budgets, debt load, or tax rates! So, you see, this makes it really easy for elected officials to blame “someone else” for taxes.
In America, we pride ourselves on having an elected government to represent our interests and make the hard decisions.
We vote for people who deal with the tough issues. We need strong leaders who take a stand. Not only should elected officials be approving special districts’ budgets and tax rates, but they should also be considering this money in a broader context for public planning of scarce public resources.
The good news is our state legislators seem to be making this issue a priority this legislative session. They should consider the following solutions:
n Every county has a fiscal court and judge-executive in a position to approve special district budgets and tax rates. Fiscal courts approve the creation of these districts; they should oversee them too. We don’t need to over-complicate this with a bunch of other convoluted and expensive state level solutions.
n Special districts that don’t comply with financial reporting requirements or that have negative findings in their audits should be dissolved.
n Specific reserve funds should be set and anything over that refunded to the public.
n Special districts that are run by the county but file their financials separate from the county should be identified in state law as special districts. Many argue they aren’t a special district so they don’t file any budget or any audit with anyone. What are they hiding?
n State approval from the Finance Cabinet or another designated agency should be required before debt is incurred by special districts or service territories are extended. The Finance Cabinet should study whether there is a duplication of services before extending districts.
n An annual list of average costs of special district services should be posted by the state so citizens and officials have context when considering just and reasonable tax rates.
Some officials might only be willing to approve the creation of a new statewide database of special districts. The creation of a database will not alone cure this problem. It can be a helpful tracking tool, but if it is too costly or presents misleading information to the public, it will make the problem we have even worse.
Politicians cannot delegate regulatory authority to a database. A database is not going to ask the tough questions of special district board members in a public setting. A database is not going analyze or punish special district board members for negative findings in audit reports. A database is not going to approve rates. A database is not going to approve whether a special district should incur debt. A database is not going to recommend other sources of financing. A database is not going to reduce redundant or inefficient spending practices.
If the database only shows whether special districts filed reports, it will not be helpful. It’s the substance of the reports that is essential, and elected officials need to be studying them, holding public meetings about them and making these documents a part of the public record.
Contact your legislator. Ask that he or she muster up the courage to take the lid off the jar to examine special district receipts before approving further expenses. Families all across Kentucky are doing this. Why can’t they?
Cheryl Avioli was hired to study special districts for Kentucky Auditor Adam Edelen and offers this viewpoint. She was a Commissioner on the Public Service Commission in New York before moving to Kentucky.
