A measure intended to provide greater oversight of the state’s special taxing districts passed both houses of the general assembly Tuesday without opposition.
The bill, House Bill 1, was the result of a compromise between the House and the Senate after the Senate made additions to the original bill that the House did not approve.
The proposed changes, which were opposed by many local government officials, would have given county fiscal courts the ability to veto any tax or fee increases by special taxing districts.
That provision would have placed a heavy burden on the Jessamine County Fiscal Court, said Judge-Executive Neal Cassity.
“I think it would create some problems,” he said. “Fiscal courts have about all they can do now.”
State Rep. Bob Damron said the issue was a top priority for the House.
“I would hope that we’re able to pass something,” he said last Friday.
The bill, sponsored by House Speaker Greg Stumbo, D-Prestonsburg, is intended to create greater oversight of the more than 1,200 special taxing districts throughout the state, which state auditor Adam Edelen has said represent a “ghost government.”
The bill will require all special taxing districts to submit a budget report to their local fiscal court. If a special district adopted a new fee or increased the rate of an existing tax, it would be required to hold a public meeting first, according to the Kentucky Legislative Commisison.
It does not allow fiscal courts to veto those increases as proposed by the Senate initially.
It also requires creation of an online registry that would include taxing districts’ annual budgets, among other information. The website would be maintained by the Department for Local Government.
The bill requires leaders of local taxing districts to undergo ethics training and to answer to a local ethics commission.
The bill comes after the auditor released a report last year that found special taxing districts collect $1.5 billion in taxes and fees each year and receive another $1 billion in grants and private donations. His report states that the districts also hold about $1.3 billion in reserves.
Edelen’s staff found that just 55 percent of the districts with revenues or expenditures exceeding $750,000 underwent annual audits, according to the Associated Press. Also, 40 percent of the taxing districts that are required to submit budgets to elected leaders in fiscal year 2011 did not.
But oversight of special districts in Jessamine County isn’t a big concern for Cassity, he said.
He added that the special districts, which include the health board, fire board and the library board, among many others, are well-handled.
“I think we have folks in these special taxing districts in Jessamine County who do a great job,” he said.
He said most of the special taxing districts in the county perform audits, which the fiscal court then ensures are sent over to the Kentucky Department for Local Government as required.
The special-districts bill now goes to the governor for his signature.