City gives first look at Lexington’s FY24 budget – $45M shortfall, new debt expected
Lexington, Ky.–Lexington Mayor Linda Gorton’s administration gave the Lexington-Fayette Urban County Council a preview of the City’s Fiscal Year 2024 budget at the Council Budget Retreat at the Lyric Theater Wednesday.
The highlights of the Mayor’s proposals included renovations to City Hall and building a new senior center near Shillito Park. Gorton’s administration projects expenses to exceed revenues by $45 million in FY24. The gap will be made up by $20 million in multi-year Council appropriations for personnel, but the remaining $25 million will need to come from the current FY23 budget. That money could come from federal ARPA money, prefunded items, or from new debt in the form of bonded funds. According to a presentation given by the Mayor’s Office, the level of bonded funds “needs to be a serious conversation.”
In Fiscal Year 2023, Council used $51.2 million in one-time and outside funds to balance the budget. $18.4 million came from ARPA and prefunding, with the remaining $32.8 coming from bonded funds and other sources. A budget analyst from UK projected that FY23 revenue would likely exceed original projections, however, providing some relief for 2024.
Lexington’s Fiscal Year 2023 debt service is $52 million, or 11.7% of the budget. Similar numbers are projected for FY 2024.
In summarizing the budget proposals, the City cited personnel increases in both sworn and non-sworn employees for rising costs. At 64%, personnel is projected to account for a greater portion of the LFUCG budget than ever before. Gorton said she didn’t recommend raising taxes to cover the new costs, however, instead saying a “mid-range” bond issuance was expected.
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