Cities, counties share 2025 priorities with lawmakers

Cities, counties share 2025 priorities with lawmakers Nov. 12, 2024

Sen. Christian McDaniel, R-Ryland Heights, shares his thoughts on medical care costs for county jails during Tuesday’s Interim Joint Committee on Local Government meeting. A high-resolution photo can be found here.

FRANKFORT — Tax revenue, road maintenance and county jail funding were among the main topics the Kentucky League of Cities (KLC) and the Kentucky Association of Counties (KACo) discussed with lawmakers on Tuesday.

Both groups presented their 2025 legislative priorities to the Interim Joint Committee on Local Government. KLC Executive Director and CEO J.D. Chaney described KLC’s agenda as “lengthy,” with road maintenance and a variety of revenue issues at the forefront.

KLC President and Benton Mayor Rita Dotson said cities need more funding for road maintenance projects, as city roads often cost more to maintain than county roads due to curb and gutter systems.

Currently, the state allocates more money to county governments for road maintenance than they do cities, Dotson said. KLC suggested making the local government funding for road maintenance from the state gas tax equal.

“The state would then split the local government portion equally between the road aid programs – the municipal road and county road aid – allowing 13% each from the 48.2% of the local government share,” Dotson said.

Another issue KLC advocated for is revenue diversification. A constitutional amendment and a change in the the restaurant tax statute were suggested.

“KLC supports legislation that would sever the statute that limits the ability of cities that are a specific size to collect consumption-based restaurant revenue, rather than imposing a nets profit or gross receipt tax on restaurant businesses,” Dotson said. “This approach ensures that every city can benefit from the economic advantages of restaurant revenue to support tourism in our communities.”

Maintaining the pension system, addressing substance use disorder, and combating the housing shortage were among the other legislative priorities for KLC. The organization also opposes legislation that would require cities to assist with county jail costs and centralized collection of local transient room tax revenue.

In response, Sen. Christian McDaniel, R-Ryland Heights, urged KLC to pare down its list of priorities since the upcoming legislative session is only 30 legislative days. He also shared his opinion on centralized collection.

“If there’s one thing I hear about from businesses on a regular basis, they despise the number of local and municipal returns they have to file,” McDaniel said. “I have over 46 myself and my small company in Kenton County.”

On road funding, Sen. Phillip Wheeler, R-Pikeville, said the county road maintenance demands are high.

“We do have certain obligations, at least in rural Kentucky, that I do think call into question as to whether or not it would be wise to take away any money under the current formula,” he said.

KACo’s presentation was next, and the organization focused on three topics: jails, revenue streams and county road and bridge funding.

“Today’s presentation could better be described as an update on the issues, rather than a big presentation filled with a lot of requests,” KACo President-elect and Harlan County Judge/Executive Dan Mosley said.

County governments are struggling to fund county jails, but that issue is not news to the committee. KACo spoke in-depth on that topic to the committee in July. Mosley focused on the issue of medical care cost for inmates on Tuesday.

“Significant changes are on the horizon for jail medical care. This year, a new federal mandate requires county jails to offer medically assisted treatment for inmates as part of the Americans with Disabilities Act,” Mosley said, using opioid abuse treatment like suboxone as an example.

One suggestion to address this issue is to consider making changes to Medicaid eligibility for inmates.

“Once someone is arrested, their Medicaid coverage is suspended,” Mosley said. “A process is being developed for inmates to remain eligible for Medicaid or to be able to re-enroll in Medicaid at the end of their sentence.”

On revenue issues, KACo also advocated for more consumption tax options at the local level.

“We understand the constitutional hurdles this presents. We urge the general assembly to approach this discussion with full appreciation for the need to protect our current revenue streams,” Adam O’Nan, KACo first vice-president and Union County judge/executive, said.

Additionally, O’Nan said Kentucky counties want to maintain funding for the services it provides while being mindful of how taxes affect residents.

Sen. Amanda Mays Bledsoe, R-Lexington, said as Kentucky grows and changes, the legislature will have to address the tax revenue issues.

“As our revenue continues to change, and as we move towards consumption, we’re going to have to have some really difficult conversations about how we pay for services,” she said. “Regardless of who does it, people still want (services) and it is our job to provide them as elected officials wherever we happen to serve.”

McDaniel brought the conversation back to county jails. He said jails “are not a city issue,” and he is concerned about how to address the medical care costs.

“What exactly happens, when we’re a state that’s already a third of the population on Medicaid, when we add even more people to that?” McDaniel said. “If there’s a formulaic change, instead of having 90/10 and 70/30 populations, what if we have 60/40 populations? And then the state’s budget becomes a disaster.”

The Kentucky General Assembly cannot act on legislation until the 2025 legislative session begins on Jan. 7. Currently, the Interim Joint Committee on Local Government will not meet again in 2024.

For more information, visit legislature.ky.gov.

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https://apps.legislature.ky.gov/publicservices/pio/release_archive2024.html#KLC111224