Edelen finds $2.7 billion ‘ghost government;’ creates online database of taxing districts

Kentucky Press News Service

FRANKFORT – State Auditor Adan Edelen Wednesday unveiled a public database and accompanying report that show special taxing districts generate $2.7 billion a year - a situation Edelen is calling Kentucky’s “ghost government.”

The auditor’s office identified more than 1,200 special districts - unelected entities such as libraries, sanitation districts and public health departments - that have the ability to fee and tax but operate with little oversight and accountability, according to a news release from Edelen’s office.

“It is a scandal that for generations no Kentuckian has been able to determine how many special districts exist, how much money flows through them, where they are located and whether they are compliant with state law,” Edelen said in a statement.

The Citizen Auditor Initiative database and “Ghost Government: A report on special districts in Kentucky” were the results of a six-month effort to survey known districts.

The effort found that special districts collect $1.5 billion in taxes and fees and another $1 billion in grants, corporate sponsorships and fundraising. In all but three counties, taxpayers pay more to special districts in property taxes than to their county governments, the report said.

And special districts hold $1.3 billion in reserves - twice the contingency funds of all 174 school districts.

Edelen’s report found that the current system treats special districts that comply with state law the same way as those operating outside it.

The status quo, the report said, is a muddled mass of laws, classifications, uncertain responsibilities, confusing mandates and no meaningful tools to compel compliance, the news release said.

“This is a really significant service to the public interest,
Richard Beliles, executive director of Common Cause of Kentucky, said in a news release. “This is a major, major improvement in government for the people.”

The full report can be found on the state auditor’s website: http://auditor.ky.gov.