Special district bill hits snag

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By Stephen Lega

Last year, State Auditor Adam Edelen launched a project to bring greater visibility to the more than 1,200 special districts serving communities throughout Kentucky.
Edelen dubbed that effort his Citizen Auditor Initiative. After gathering budget and other information about those districts, his office launched a website (http://apps.auditor.ky.gov/public/theregistry/cai.html) where citizens could find more information about the districts in their areas. Statewide, those districts manage approximately $2.7 billion of taxpayer funds.
Building on that initiative, Edelen backed legislation during the current session of the General Assembly. House Bill 1 would create an online registry for special districts to report their administrative and financial information, specifying audit requirements for those districts, and establishing consequences for districts that fail to comply with reporting requirements.
HB 1 passed the Kentucky House of Representatives with overwhelming support, 96-1. Two legislators did not vote on the bill.
Sen. Damon Thayer, R-Georgetown, proposed an amendment to HB 1 that would give fiscal courts the authority to veto tax increases proposed by those special districts. The amended version was approved by the Senate, 23-10.
Marion County’s State Representative Terry Mills supports the bill that was passed by the House of Representatives.
“Personally, I like HB 1 with no amendments,” he said.
State Sen. Jimmy Higdon voted in favor of the amended version of the bill. He said some senators wanted to give fiscal courts even greater control over the special districts and their budgets.
The approved Senate version reflects a compromise between senators who liked HB 1 as it was and senators who didn’t think it went far enough. Nevertheless, Higdon does not expect the amended version to be the final version.
“I supported that knowing it will go to the House, and the House wouldn’t accept it,” he said.
Marion County Judge/Executive John G. Mattingly said fiscal courts do not want veto authority over the special districts. He said county judge/executives and magistrates have expressed support for the original version of HB 1.
In most cases, county governments already appoint the members of the boards and commissions that oversee the special districts. Giving fiscal courts the additional responsibility of approving those districts’ budgets could create problems, according to Mattingly. This could mean higher bonding rates for fiscal courts. If the courts were considered responsible for those districts, then the county could be held liable if something went wrong with those districts.
“It’s no advantage to the county at all,” Mattingly said. “It’s another political liability.”
Higdon said he’s heard the concerns of county officials. He also said that HB 1 is good legislation, and he would support it even without the Senate amendment.
Mills said whether the legislation is approved during this session will depend on whether a compromise can be reached in conference committee.
“It’s down to leadership now,” he said.