Kentucky Gov. Steve Beshear has signed House Bill 1 into law imposing greater transparency and oversight requirements over the state’s more than 1,200 special districts.
The legislation was spearheaded by Auditor Adam Edelen, who found in a special study of districts that they collect $1.5 billion in taxes and fees annually, and another $1 billion in grants, corporate sponsorships, and fundraising.
The new law requires special purpose government entities, such as libraries, fire departments, and sewer districts to submit their budgets to a publically accessible online registry. The Department for Local Government is expected to make the registry available to the public in October 2014.
HB 1 also imposes auditing standards, and requires districts to hold public meetings before increasing taxes or fees, and to report their budgets to fiscal courts. Districts that are not in compliance with reporting and auditing standards could be subject to an examination by the state auditor’s office and lose state funding.
“For the first time ever, taxpayers and citizen watchdogs will be able to make sure their dollars are being spent wisely by those who are charged with delivering vital public services in the Commonwealth,” Edelen said.
Edelen said his investigation found that in all but three districts, taxpayers paid more taxes to special districts than to county governments. The districts also had a combined $1.3 billion in reserves, twice the amount held by the state’s 174 school districts.