By Ronnie Ellis / CNHI News Service
There are 1,268 special taxing districts in Kentucky which amount to “a ghost government” that spends more money annually than the state spends to educate its children.
That was the conclusion of Auditor of Public Accounts Adam Edelen when he released his report on the taxing districts Wednesday.
The review of the districts — Edelen defined them as “unelected entities that have the ability to tax or fee the public” — is the “most massive effort in the history of the auditor’s office,” Edelen said.
Taxing districts are established to fund and operate such public services as fire departments, libraries, conservation districts and a host of other quasi-government programs or services. They are required to submit their budgets to the local fiscal courts — but many don’t or at least haven’t until now.
“It is a scandal that for generations no Kentuckian has been able to determine how many special districts exist, how much money flows through them, where they are located and whether they are compliant with state law,” Edelen said.
In total, the districts spend around $2.71 billion without any real public accountability or oversight by elected officials. The districts take in $1 billion annually in tax revenues or fees assessed on the public. The rest of the expenditures are funded by grants and other funding sources.
“That’s billion with a ‘B,’” folks,” Edelen told reporters. The amount is nearly equal to the $2.73 billion the state spends to fund public schools and more than double what Kentucky spends on its road fund and Medicaid.
Edelen was careful to say that many of the districts comply with all the regulations and legal requirements. He specifically mentioned libraries, many of which were established by voter referenda, some more than 50 years ago.
“Kentucky libraries operate in 106 counties and they have built-in accountability from the state Department of Libraries and Archives,” Edelen said. Most of them have ethics and accountability guidelines and boards and staffs receive professional training from the state department.
But 40 percent of the districts submitted no budget to their respective fiscal courts and 15 percent did not file Uniform Financial Information Reports (UFIRs) to the state Department of Local Government (DLG).
Districts with annual budgets of $750,000 are required to conduct an annual audit, but half of them have not done so, according to the report. Those with smaller budgets are supposed to audit accounts at least once every four years, but again many haven’t done it.
Edelen said it is unacceptable that the current “byzantine system” treats both the good and bad actors in the same way.
“In short, the system is broken and in need of big change,” Edelen said. “A reformed and modernized system will make this ghost government more accountable to the public it serves.”
Edelen’s staff has established a website and database where the public can view the special taxing districts by county. It can be accessed online at www.Citizenauditor.ky.gov.
The report also offers several recommendations:
Modernize and reform the 50 chapters of Kentucky Revised Statutes governing special taxing districts and the 1,000 individual statutes on the districts.
Authorize DLG to notify the Auditor of any taxing district not in full compliance with laws and regulations and make those districts subject to an audit by the state auditor.
The districts should be subject to the ethics codes of the county the district serves.
“We’ve got to get a system that compels compliance,” Edelen said, adding that those districts which didn’t fully cooperate in his survey “just nominated themselves to be on a radar they didn’t want to be on.”
He said his office will likely look first at those districts which didn’t cooperate with his survey as it continues to look at their governance and accountability.
Sen. Damon Thayer, R-Georgetown, the Senate Chair of the State Government Committee, has said he plans to introduce legislation addressing special taxing districts and the problems identified by Edelen.
Edelen’s review was endorsed by DLG, a legislative task force reviewing the districts and a number of umbrella groups representing local government groups such as counties and cities.
RONNIE ELLIS writes for CNHI News Service and is based in Frankfort. Reach him at email@example.com. Follow CNHI News Service stories on Twitter at www.twitter.com/cnhifrankfort.
‘Ghost government’ spends more than state spends for education
By Ronnie Ellis / CNHI News Service
- Local News
Hospital to identify new strategic partner
Jellico Community Hospital in Jellico, Tennessee began the formal process of identifying a new strategic partner in order to ensure the continued long-term delivery of health care to the community.
Fire damages Flat Lick mobile home
Thanks to some quick work by two volunteer fire departments, what could have been a serious, damaging structure fire to a Knox County mobile home Tuesday was contained within five minutes.
Tourism to talk with city about next year’s 4th of July
Could next year’s Independence Day celebration in downtown Corbin be held on July 4th, instead of July 3rd?
Shop With A Trooper program kicks off
Froyoz in Corbin was packed with Kentucky State Police troopers Tuesday — and it was all for a good cause. KSP Post 10 kicked off the state police’s annual Shop With A Trooper charity fundraising program at Froyoz, which included selling KSP
‘Not guilty’ plea entered in Laurel murder
A pretrial conference was scheduled Monday for a man facing murder charges.
London Council hears garbage, recycling proposals
A private garbage contractor told London City Council on Monday they’d like to save the city some money on garbage and recycling services in the future.
Downtown Corbin crash injures two
A two-vehicle crash Monday at the corner of Kentucky Avenue and Roy Kidd Avenue in Corbin involved eight persons and sent two juveniles to Baptist Health Corbin hospital with non-life threatening injuries.
Trial for Corbin couple averted by plea agreements
A Corbin couple arrested for trafficking in marijuana appeared before Judge Dan Ballou in Whitley Circuit Court Wednesday — each was slated for a jury trial.
New website for lake enthusiasts
The U.S. Army Corps of Engineers Nashville District has developed a new mobile website containing lake information just in time for summer.
Airport debt discussed by board
An attempt to refinance the Williamsburg-Whitley County Airport debt load hit a roadblock Thursday during a special-called meeting of the county’s finance committee.
- More Local News Headlines
- Hospital to identify new strategic partner