New KLC leaders shift focus from spending problems to pushing for tax, pension reforms

02/09/2011 07:27 PM

The new leaders of Kentucky League of Cities pledged to run an open and better-watched organization as they now turn their attention to lobbying the legislature to reform the state’s tax code and public pension systems.

The new executive director, Jonathan Steiner, and KLC President Bill Paxton, the mayor of Paducah, appeared on Pure Politics Wednesday, which was designated as “City Day” in Frankfort. KLC assembled hundreds of local officials in Frankfort to rally for city issues.

KLC took a public image hit in 2009 after the Lexington Herald-Leader revealed what the organization had spent on travel, meals, entertainment and salaries, as well as conflicts of interest with top executives.

Paxton, who took over last month as KLC president, said as a board member he “didn’t pay as much attention” as he should have in recent years.

“I’m going to tell the board: We’re going to have to pay attention, we’re going to have to stay involved, we’re going to have to know what the issues are,” Paxton said. “We’ll be scrutinizing those finances.”

Among the specific changes underway is that elimination of a think tank called the New Cities Institute that was the creation of former KLC executive director, Sylvia Lovely.

The Herald-Leader’s Linda Blackford, who led the newspapers investigation into KLC’s spending in 2009, published an article stemming from a wide-ranging interview with the new director Steiner, in which he said he was disbanding the New Cities Institute.

Steiner declined to call the entity a waste of money.

“I would say the New Cities Institute was doing very good work. It certainly got a black eye from the Auditor’s report,” Steiner said on Pure Politics.

Steiner, who started Nov. 1 after coming from the New Hampshire, also pledged that KLC will be forthcoming with information.

“Anything that we can do that’s public and open — open records law — fine with me,” he said. Steiner said proprietary information about the insurance business KLC does with cities, such as rate calculations, should remain private.

Steiner and Paxton said one of KLC’s goals is to encourage lawmakers to revamp the tax code. Among other things, Steiner said cities should be able to decide whether to apply

KLC would always advocate in favor of cities to decide what would be best for them. If you’re a tourism destination and you can raise money through tourism and taxes through that manner, that’s great. If you’re a manufacturing hub and you can bring in money from the payroll taxes, that’s great too,” Steiner said.

And the two KLC leaders said trying to stem the cost of the public pension system. The Kentucky Retirement System voted last fall to increase the amount cities would have to pay for retirees to nearly 19% and for those who retired from hazardous duty jobs to nearly 36%. Those contribution rates have doubled since 2004.

“Long term, we need rates to come down,” Steiner said. He said the board would support moving to a “defined contribution” or 401(k)-style approach — if it proves to be cheaper for local governments in the long and short term.

- Ryan Alessi

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