Budget Committee Steers Leftover ARP Dollars to Main Library Entrance

Louisville’s Budget Committee moved to keep federal recovery money from expiring unused by redirecting leftover American Rescue Plan funds to an accessible second entrance at the Main Library. Members amended and passed the reallocation with 7 yes votes and advanced a Revenue Commission ordinance that will push frequent filers off paper tax returns starting Jan. 1, 2027.

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• Unspendable ARP funds shift to Main Library accessibility project ahead of the Dec. 31, 2026, federal deadline
• Amendment trims the gun-violence project draw from $75,000 to $50,000 after $25,000 in eligible costs surfaced
• Mandatory e-filing expands to taxpayers filing 10 or more returns annually, starting Jan. 1, 2027
• Revenue Commission refund rules align with state law as “shall” becomes “may”

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Racing the ARP Clock: Library Gets the Leftovers

The basics: The American Rescue Plan (ARP) sent federal Local Fiscal Recovery Funds to cities. Louisville allocated its share through a series of “rounds” approved by ordinance. O-306-26 amends two of those, Ordinance No. 168, Series 2021 (Round 2), and Ordinance No. 075, Series 2022 (Round 4). (O-306-26 Legistar page)

Why it matters: The money must be used or Louisville risks losing it. “All of our funds have to be spent by December 31st, 2026,” said Ken Hillebrand, Assistant Director, Office of Management and Budget. He noted the funds must also be reconciled by that date.

Where things stand: Two projects had money they could no longer spend. Under the ordinance, $50,000 from the coordinated crisis response to gun violence project and $330,000 from compliance and reporting will be combined and moved by journal voucher to the Main Library’s accessible second-entrance project.

The gun-violence figure changed on the floor. The original ordinance would have taken $75,000 from that project. The committee reduced it to $50,000 after staff found $25,000 in eligible costs that had previously been charged to the general fund.

The other side: Pulling money from a gun-violence program could draw scrutiny, and the committee addressed that concern directly. One speaker stressed that the project had spent about $900,000 of its $1M allocation and that the money was being taken back because the work was already finished, not cut from an active program.

Decisions and stakeholder impacts: The amendment passed by voice vote. The chair declared it approved without announcing a tally. The amended ordinance then passed by roll call with 7 yes votes, and one speaker described the support as unanimous. Library patrons with mobility needs stand to gain a second accessible entrance. The gun-violence response work loses no active funding, according to the presenters. For Metro’s budget office, the move closes out stranded balances before the federal deadline.

What’s next: Because the ordinance was amended, it goes to the full Metro Council as old business rather than the consent calendar. The council must act in time for the funds to be spent and reconciled by Dec. 31, 2026.

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Paper Tax Returns Get a Deadline

Why it matters: About 20% of tax returns filed with the Louisville Metro Revenue Commission still arrive on paper. The agency says shifting more filers online will cut errors, processing costs and its reliance on lockbox services, the third-party processing of mailed payments. (O-305-26 Legistar page)

Where things stand: O-305-26 amends Section 110 of the Louisville Metro Code of Ordinances (LMCO) in two main ways. First, it expands mandatory electronic filing to taxpayers who file 10 or more returns a year, effective Jan. 1, 2027. Second, it brings refund rules in line with state statute KRS 67.788.

“The proposed amendment changes the word shall to may,” said Tracy Goranflo, Executive Director, Louisville Metro Revenue Commission. The change applies to employer confirmation of refund claims. Under the new wording, the Revenue Commission may require that confirmation but is no longer obligated to.

“Currently, approximately 80% of tax returns are filed electronically while the remaining 20% are submitted by paper,” Goranflo said.

The other side: A committee member pressed on scope. The Revenue Commission also collects taxes for entities other than Metro government, including the hotel tax, the transient tax and the Tourism Improvement District (TID) assessment. The member asked whether those returns count toward the threshold.

They do, Goranflo said. “So if they file an OL, their W-1s, a transient, and a TID assessment, yes, it would apply to all of those.” OL refers to the occupational license tax.

Decisions and stakeholder impacts: The ordinance passed by roll call with 7 yes votes. The biggest effect falls on businesses and payroll filers that submit many returns, especially hospitality operators who file transient tax and TID returns alongside occupational license filings. Those combined returns could push smaller filers past the 10-return threshold.

What’s next: The ordinance heads to the full council’s consent calendar. Affected filers have until Jan. 1, 2027, to move to electronic filing.

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Minor Items

• District 1 transfer: O-288-26 moves $10,000 from District 1’s Neighborhood Development Fund to council general operations, raising the cost center from $30,000 to $40,000. The money splits evenly: $5,000 for public meeting expenses and $5,000 for public relations services. Beth Stenberg presented on behalf of Councilmember Tammy Hawkins, who was absent. The item passed with 6 yes votes and no questions and goes to the consent calendar.

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Looking Ahead

The amended ARP reallocation is the item to watch at the full council. It is the last-mile step to make sure the leftover federal dollars reach the Main Library before the Dec. 31, 2026, spending and reconciliation deadline.