The second meeting of the Interim Joint Committee on Local Government was held on Thursday, July 15, 2004, at 1:30 PM, in International A Room of the Executive Inn Rivermont in Owensboro, Kentucky. Representative Steve Riggs, Chair, called the meeting to order, and the secretary called the roll.
Present were:
Members: Senator Alice Kerr, Co-Chair; Representative Steve Riggs, Co-Chair; Senator Johnny Ray Turner; Representatives John Adams, Adrian Arnold, James Comer, Mike Denham, Ted "Teddy" Edmonds, Derrick Graham, Jimmy Higdon, Charlie Hoffman, Reginald Meeks, Arnold Simpson, Roger Thomas, and Jim Wayne.
Guests: Senator David Boswell; Representative Tommy Thompson; Vince Lang and Shellie Hampton, Kentucky County Judge/Executive Association; Richard Tanner, Kathy Marshall, and Sam Crawford, Kentucky Magistrates and Commissioners Association; Tommy Turner, Larue County Judge/Executive; Teresa Barton, Franklin County Judge/Executive; N. E. Reed, Edmonson County Judge/Executive; Tony Carriss, Shelby County Magistrate; Hugh McCormick, Henderson County Magistrate; Reid Haire, Daviess County Judge/Executive; James Kemper, Franklin County Jailer; Bill Drury, Spencer County Magistrate; Dick Murgatroyd, Transportation Cabinet; and Bert May, Kentucky League of Cities.
LRC Staff: Jamie Franklin, Mark Mitchell, Joe Pinczewski-Lee, Tiffanie Gray, and Cheryl Walters.
Representative Riggs welcomed everyone to the meeting and thanked the Kentucky County Judge/Executives Association and the Kentucky Magistrates and Commissioners Association for inviting the Committee to meet during their joint summer convention. He noted that this was the first time the Committee has ever met during this convention. Representative Riggs next asked the members to introduce themselves. Representative Riggs then turned the meeting over the Senator Kerr.
Senator Kerr asked for a moment of silence in remembrance of Blanche Daniel who had recently passed away. She then introduced Mr. Vince Lang, former Hart County Judge/Executive and Executive Director of the Kentucky County Judge/Executives Association, and Mr. Richard Tanner, Executive Director of the Kentucky Magistrates and Commissioners Association, for opening remarks. Mr. Lang welcomed the Committee to their convention and thanked them for coming. He told the Committee that counties have three unfunded mandates: 1) incarceration of prisoners; 2) election expenses; and 3) advertising costs. He noted that funding jails was the number one problem for counties. Mr. Lang stated that many counties have to raise taxes to balance their budgets because almost 20% of most counties' general fund is spent on jails.
Mr. Tanner told the Committee that the Kentucky Magistrates and Commissioners Association was formed in 1952. He noted that his Association loaned money in 1976 for the formation of the Kentucky Association of Counties. Mr. Tanner stated that Magistrates Tony Carriss and Hugh McCormick of their Association would address the Committee later on regarding advertising and election costs for counties.
Mr. Lang next introduced Judge Tommy Turner, Larue County Judge/Executive and President of the Kentucky County Judge/Executive Association, to give an overview of county jails. Judge Turner told the Committee that jails present possibly the greatest financial challenge facing counties since the creation of our Commonwealth. He noted that it is not uncommon that one-third to one-half of a county's general fund revenue is dedicated to bridge the deficit between state jail funds and the county's jail fund. Judge Turner stated that it is difficult and disheartening to spend so much available revenues on a few unlawful citizens, and so little on the balance of the law abiding, deserving citizenry.
Judge Turner explained that in 1975, a judicial article amendment to Kentucky's constitution, creating a unified court of justice in Kentucky, was passed and forever changed the control, jurisdiction, and responsibilities for local jail operations. He noted that until the passage of the amendment, jails were primarily county functions, had primary oversight from the fiscal court, and had the county judge as the primary judicial authority in command. Judge Turner said the judicial article created a system that left local government with the responsibility of funding facilities and inmate costs, but with virtually no say in other matters related to their operation. In 1978, with the full implementation of the judicial article, Judge Turner mentioned that the requirement for cities to contract with counties to house inmates arrested within the bounds of a city was eliminated. He added that until this point in time, a person charged and arrested with a crime in a city limit, became a city inmate. Judge Turner next stated that in 1982, the Kentucky Jail Standards were passed, which helped begin the drastic upward spiral in jail costs for counties. He noted that until 1982, the Commonwealth had made an annual payment to jails, both city and county facilities, to assist with local jail costs. Judge Turner explained that the payment to jails was based on a bed allotment formula, which was replaced with a jail per diem payment to counties. He said this per diem payment, however, did not contain a provision to increase revenue over time, and from that time until today, the 10% cut from pre-1982 levels have never been restored. Judge Turner pointed out that therefore, counties receive 10% less today on their jail per diem than they did in 1982.
Judge Turner told the Committee that there are many reasons jails costs are on the verge of bankrupting counties. One is increased medical costs incurred by counties for inmates. He stated that it is not unusual to have an inmate receiving chemotherapy, or for others to require various types of surgeries, including heart bypass and other costly procedures. Judge Turner said inmates often tend to be among the unhealthiest segment of our population due to their lifestyle prior to incarceration.
Judge Turner stated that another point of major contention concerns the housing of inmates at county expense for violation of state laws. He said in the last 20 years, Larue County has not had a single inmate lodged on county related charges, but with all time served in the county jail credited toward the inmate's state sentence. Judge Turner said another problem results because the cost for housing an inmate is not remitted to the county until the sentencing of the prisoner. This delayed payment schedule, and the fact that many prisoners have their sentences reduced by receiving credit for time already served in the county jail, also creates a serious deficit in jail funding.
In closing, Judge Turner told the Committee that jails, and their associated costs, are the single most important issue facing counties in Kentucky. He said the counties appreciate any and all consideration given to address this matter.
Judge Turner then introduced Judge Teresa Barton, Franklin County Judge/Executive and KCJEA Legislative Chair, to address the Committee on jail legislative proposals. Judge Barton told the Committee that counties carry the burden of incarceration costs, which are exorbitant, for state inmates until the inmate is sentenced. She said they believe the costs associated with time-served relating to holding state prisoners prior to their sentencing should be the responsibility of the Commonwealth.
Judge Barton explained that costs associated with providing necessary medical, dental, and psychological care for state inmates have been more than most counties can afford. She noted that although they do not agree with the legal interpretation, it was recently ruled that psychotropic medication costs are the responsibility of the counties. Judge Barton also mentioned that once an inmate is incarcerated, medical and SSI cards are invalid or suspended and counties pay the costs. She added that pre-existing conditions in inmates prior to incarceration are another huge concern.
Judge Barton stated that the per diem rate for housing state inmates at county facilities is $26.51. Of that $26.51, $1.90 per day is designated to cover medical costs. She said that private prisons charge as much as $30 or $35, and that the counties' position is they should be compensated at least equal to that paid to private prisons for housing inmates at county facilities with the same level of security and programming.
Judge Barton told the Committee that counties frequently are faced with inmates who have catastrophic illnesses and counties can only apply for assistance for costs that exceed $2,000, subject to certain conditions. She added that the state has traditionally provided funds for this item totaling about $400,000 per year. However, Judge Barton said this is not nearly enough for today's AIDS patients, cancer patients, or for other major surgeries or medications.
Judge Barton stated that counties realize that there is currently no additional state funding available, but they also recognize that there needs to be continued dialogue on these financial matters and they want to explore other solutions to local funding problems. She said although there are many possible options, one to consider is removing the arbitrary ceiling of 1% on occupational taxes for counties with a population over 30,000.
In closing, Judge Barton stated that jail costs are just a portion of the expenses that strap county governments. She noted that others would be discussing with the Committee, other statutory responsibilities with which counties are charged.
Representative Meeks asked what were life safety jails. Judge Turner answered that life safety jails were only qualified to house county inmates not state inmates. He added that there are two types of jails, life safety and full-service jails.
Judge Turner introduced Judge N. E. Reed, Edmonson County Judge/Executive, to discuss the issue of closed jails. Judge Reed told the Committee that his jail is one of 33 jails that have been closed but they still have expenses. He said they are trying to use prisoner co-pays as much as possible but still have to take out extra money for jails costs even though they contract out their prisoners. Judge Reed stated that the backlogs in courts are costing counties a lot of money and prisoners often are credited with time served so counties do not receive any money. He explained that often inmates also learn to work the system to pay for medical costs for conditions which they may have already had prior to incarceration, but for which they have no insurance.
Referring to a handout listing only seven out of 111 counties that are operating at a surplus, Representative Graham asked what the seven counties were doing that the other 104 were not. Judge Turner stated that those counties are housing federal inmates and get more revenue. Representative Graham also asked if interlocal agreements would help or would it be better if the entire state went to a regional jail system. Judge Turner answered that this often results in the shifting from county to county, but sometimes with no real savings because many jails which have inefficient methods are already closed.
Representative Graham asked if the counties had talked with the current administration regarding the jail problems. Judge Barton responded that there has been a great deal of dialogue with the current administration. She said they need to make sure there is a level playing field, especially with cities, for local tax dollars. She added that counties do not want to compete for tax dollars, but that they do need to have access to more money. Representative Graham stated that counties should provide the General Assembly with a list of solutions so that they can be addressed. Judge Turner stated that counties have presented ideas for legislation in the past but would be happy to continue to do so if there is hope for more funding.
Representative Wayne commented that the jail issue is a crisis everywhere. He said the Local Government Committee may not be the only committee to address this problem. Representative Wayne suggested that the A&R and Judiciary Committees should look into this problem as well. He stated that a fair and adequate tax system is needed so that additional revenues can be raised. Representative Wayne told the counties to put pressure on the General Assembly.
Representative Hoffman commented that he served on a task force on city/county relations in 2001 which discussed the occupational tax issue. He asked if the counties have been working with others to try to resolve the jail issue. Judge Turner stated that the counties have been working with the Kentucky League of Cities regarding the need to share taxes.
Regarding the issue of medical cards becoming invalid upon incarceration, Representative Thomas asked if this is common in all states. Judge Turner replied that it is a federal provision.
Representative Comer commented that the authority to raise more money at the local level may be too difficult. He asked if the counties have come up with other solutions. Judge Barton stated that more money for catastrophic illnesses, with line item amounts, would be helpful. She also said some inmates are abusive of the system. Representative Comer stated that the Committee should also address pre-existing illnesses of inmates.
The next item of business was discussion of advertising and election costs for counties by the Kentucky Magistrates and Commissioners Association. Senator Kerr introduced Mr. Tony Carriss, Shelby County Magistrate and legislative committee chair, and Mr. Hugh McCormick, Henderson County Magistrate and KMCA President.
Mr. Carriss told the Committee that KRS Chapter 424 has been on the books since 1958 and mandated the use of newspapers long before the communication options of today. He said Chapter 424 needs to be updated and revised. Mr. Carriss stated that counties and cities must move into the 21st century and save millions of taxpayers money as counties and the public become more technology advanced. He noted that HB 583, which failed to get out of committee during the 2004 session of the General Assembly, would have reduced the number of publications counties would have to publish and allow some required publications to be published via internet. He said his Association would like to introduce a new version of HB 583 for the 2005 session of the General Assembly. Mr. Carriss emphasized that they do not want to eliminate newspaper publishing, that they only want to make it fair. He added that local governments should also have the option to levy impact fees for new development.
Mr. McCormick told the Committee that counties also need help with the cost of elections. He noted that $5.5 million was paid for elections, with the state paying $1.8 million and counties paying $4 million. Mr. McCormick stated that these types of unfunded mandates are taking a toll on counties. He mentioned that HB 209, which did not pass during the 2004 session, would have increased the state's share of election payments from $255 to $700 per precinct, and appropriated $2,433,900 in FY 2004-2005 and $2,433,900 in FY 2005-2006 to the State Board of Elections for an increase in the state's share of election cost payments to counties.
Representative Hoffman commented that local governments have tried to levy impact fees and it was found to be unconstitutional by courts. He noted that currently only Lexington-Fayette Urban-County Government can levy impact fees, which is done by special legislation. Representative Hoffman asked if this could be accomplished for others. Mr. Carriss stated that they hoped to have legislation which will allow both cities and counties to levy development impact fees in the future.
Senator Kerr then told the members that the August meeting of the Committee would be held in the Metro Louisville area.
There being no further business, the meeting was adjourned at 3:50 p.m.