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Louisville: Lessons from a regional city

By , CT Mirror | October 22, 2019

Cast iron buildings in downtown Louisville. The city has a mix of old and new buildings, a thriving tourist economy and benefits from something Connecticut cities don’t have — a merger with its surrounding county.

Louisville, Ky. — Louisville is known for bourbon, baseball bats and a famous horse race, but the city on the southern bank of the wide Ohio River has another distinction: it is the last large city in the country to have merged with its surrounding county.

In 2003, the city merged with Jefferson County, creating the Louisville-Jefferson County Metro Government, known as Louisville Metro. What had been the 65th largest city in the country overnight became either the 27th or the 18th — depending on whether the residents of the semi-autonomous towns within the metro (see below) are included. Today’s population is either 620,000 or 770,000, depending on who is counted.

Officials believe the merger streamlined government and, especially, focused and strengthened economic development.

“We speak with one voice, the benefit of which cannot be overstated,” said Mayor Greg Fischer, a Democrat and former business executive now in his third term, during a recent interview in his office.

“We speak with one voice, the benefit of which cannot be overstated.”

Louisville Mayor Greg Fischer

Though Connecticut has no county governments with which cities could merge, there are semi-regular calls for more regional governance. The Louisville experience shows the challenge of creating a regional city, and the potential benefits.

Why not more?

If city-county consolidation worked in Louisville — and the city appears to be thriving, winning many “hip city” rankings and other accolades in recent years — it is fair to wonder why no one else has done it.

It’s not for lack of trying. Consolidations have been proposed in Pittsburgh, Cleveland, St. Louis, Memphis, Albuquerque and other cities.

Though there have been a few notable successes from the mid-20th century — Nashville, Jacksonville and Indianapolis — most consolidation efforts don’t get off the drawing board. Successful consolidations “are few and far between,” said James Brooks, director of housing and community development for the National League of Cities.

A riverboat at the Louisville dock.

First, there is wide disagreement on whether consolidations are worth the effort.

“The academic research is mixed,” said Brooks.

Proponents think regional cities offer the chance for greater government efficiency, economies of scale, social and fiscal equity, added planning capacity and more focused economic development — speaking with one voice. They think too many governments in a particular area makes government more expensive than it has to be, encourages sprawl and inhibits broad vision economic development.

A metropolitan city such as Louisville can “elevate aspirations … create the ability to act cohesively to solve big problems,” said Mark Muro, director of the Brookings Institution’s Metropolitan Policy Program.

Opponents, however, argue that consolidations don’t create efficiencies, and that smaller governments are leaner and hungrier, encourage citizen participation, are more transparent and offer choices of communities in which to live. The nays believe consolidated governments can become top-heavy and inefficient, can lessen community identity and can diminish the minority political representation that existed in the former city.

In Louisville, “the facts didn’t support the merger, and neither does research in the field,” said former University of Louisville professor Hank Savitch, now affiliated with Florida Atlantic University and the Woodrow Wilson International Center for Scholars, who opposed the 2003 merger.

Many disagree.

A 2008 study by the RAND Corporation into whether a merger of Pittsburgh and Allegheny County would improve the region’s economic development could find no definitive evidence either way. The study concluded the merger would have a “generally positive effect” on the region’s economic development by providing unified leadership, improved policy direction and better coordination.

The authors acknowledged, however, that these qualities are hard to measure, and that success would also depend on partnerships with the private sector and a streamlined regulatory environment.

Four decades, and four elections

The Pittsburgh merger never happened, as most have not. Even where there is considerable support, city-county consolidations are devilishly hard to pull off. That was the case in Louisville, where it took four decades and four elections.

Founded by Revolutionary War leader George Rogers Clark as a portage city around the Falls of the Ohio River, Louisville’s central location helped it grow to be a manufacturing and shipping power in the 19th and early 20th centuries.

As in Hartford, an elevated highway blocks part of downtown from the riverfront.

It has a grid of wide and straight streets, typical of cities in that part of the country. It has a mix of modern and historic structures, with a significant Victorian district, a street of cast iron structures and two of the country’s most elegant hotels, the Brown and the Seelbach. It has Olmstead-designed parks.

It is also a car-oriented city. As in Hartford, an elevated highway cuts off part of downtown from the river, but there is also a riverfront park.

Like many older industrial cities, Louisville lost jobs, tax base and (mostly white) residents in the years after World War II. Many who left the 62-square-mile city moved to the surrounding county. The first effort to merge the city and county failed in a 1956 vote.

Proposed consolidations sometimes founder over the issue of merging schools. Here Louisville had an advantage. The city was hit with a school desegregation order in the 1970s requiring the busing of thousands of children. This, perhaps not surprisingly, caused a huge and bitter controversy. But over time, people got used to a single school district, according to independent researcher Jeff Wachter in a 10-year retrospective of the merger.

A main point of contention was economic development. The city and county battled each other for new businesses, something many viewed as a waste of time and energy.

“As a business guy, I don’t have time for this,” said Mayor Fischer, a young professional at the time of the merger.

A Louisville street shows the mix of old and new buildings.

Despite consistent support from the business community, merger elections failed in 1982 and again in 1983. At this point city and county officials came up with an idea to reduce city-county competition.

Kentucky — remarkably — allows communities to impose an “occupational tax” — essentially an income tax based on place of work — on persons who work in the community. Louisville and Jefferson County created a compact in which the city and county would impose a small occupational tax — 1.25% of earnings — on everyone who worked in the county and then distribute it to the place where the worker lived, either the city or the county. That way, the thinking went, both city and county would benefit from new development.

Wachter reports that the tax innovation somewhat reduced city-county acrimony and competition. But officials and business leaders had begun working on regional economic development and land use plans, and thought they could do better with regional governance.

In the late 1990s, they planned one more consolidation campaign. It was led by an urban Democrat, popular Louisville Mayor Jerry Abramson, who served from 1985 to 1998, and a suburban Republican, county judge/executive Rebecca Jackson.

The pair presented an upbeat message — consolidation could make a great city greater! They believed a consolidated metro would unify leadership and vision, streamline government, and provide a psychological boost, such as it might be, by making the top 25 largest cities list and becoming the largest city in Kentucky (overtaking Lexington, also a merged city-county).

Despite strong opposition, the referendum in 2000 passed with 54% of the vote. It went into effect in 2003.

Most city-county consolidations are hybrids, part local and part regional, not complete transformations. This was no exception.

After the merger there were 83 semi-autonomous towns within the Metro. Residents of these communities received some services from Louisville Metro, for which they pay Metro property taxes, and pay for other services, such as trash pickup, themselves. They vote to elect the Mayor of Louisville Metro and members of its 26-member council.

Residents of the former city, now called the urban services district, pay higher property taxes and get more services. The occupational tax, which Louisville Metro chief financial officer Daniel Frockt describes as a “license fee for the privilege of earning income” in the city, is still in effect and provides nearly 60% of the Louisville’s annual revenue.

But did it work?

After serving as mayor of the former city, Abramson became the first mayor of new Louisville Metro, serving from 2003 to 2011. He went on to become lieutenant governor of Kentucky and then director of intergovernmental affairs in the Obama White House, where he dealt with many city issues.

Now executive-in-residence at Louisville’s Spalding University, Abramson said in a recent interview that the two main goals of the merger were to speak with one voice on economic development and to create a more effective and cost-efficient government. He believes both were accomplished.

Former Louisville mayor Jerry Abramson, who helped lead the consolidation efforts.

Abramson said when he merged police and some other departments, there were more managers than necessary.

“I felt like Noah. I had two of everything,” he said. But by thinning out the now-redundant positions, he was able to put more officers and EMTs on the street.

Interestingly, they did not merge fire departments, which was deemed a political bridge too far. But since the merger, suburban fire departments have begun to consolidate.

“I felt like Noah. I had two of everything.”

Former Louisville mayor Jerry Abramson

Even without the firefighters, Abramson said he was able to reduce the overall public workforce by 20% with no layoffs. Critics said he didn’t reduce the cost per worker — when union contracts were merged they went for the higher number to win worker support — but, he said, “there were 20 percent fewer of them.” He believes the merger gave Louisville more clout at the capital.

In his 10-year look-back, Wachter concluded the merger achieved “mixed results.” He noted that the cost and size of government did not go up, as opponents predicted, nor did taxes — indeed they went down slightly. Population grew.

But employment was down slightly, due in part to the 2008 recession and to the restructuring of the economy away from manufacturing and toward the professional and information sectors.

While the city retains some manufacturing and seeks more, some won’t be missed. One factory that closed in the early 2000s was the city’s last cigarette maker, Brown & Williamson. Coffin nails are not thought to be a growth industry.

And now

Shortly after he took office Mayor Fischer restructured the city’s economic development effort, creating an agency called Louisville Forward. It combines business attraction and retention with the city’s workforce and planning and land use functions to create a one-stop shop for companies considering a move to Louisville.

It seems to work.

Since 2014, said agency spokeswoman Caitlin Bowling, the agency has “directly impacted the creation of 23,276 new jobs through 269 projects, with an associated investment of $5.6 billion.” In 2018, she said, there were “more than 1,100 new private businesses operating in Louisville than there were in 2014.”

Mary Ellen Wiederwohl, the chief of the agency, said in an interview that its success is “absolutely” connected to the merger. She said by eliminating the battles between the city and the county “we start on second base. We don’t waste any calories.”

Fortune has also smiled on Louisville in some ways not directly connected to the merger.

Fourth Street entertainment venues in Louisville, which feature its thriving “bourbon tourism.”

A bold move by Abramson in the 1980s to expand the airport, which meant relocating 2,750 families and 150 businesses, led to the creation of the UPS WorldPort, which in turn has attracted nearly 300 businesses and tens of thousands of jobs to the region.

With warehousing and shipping becoming more automated, Wiederwohl said her agency is now pushing for smaller, time-sensitive, high-value “end of runway” businesses — medical testing, dental products and computer repair — that require quick turnaround and are located within 30 minutes of the end of the runway.

Also, Louisville has hit a homerun with “bourbon tourism.” It is said locally that 95% of the world’s bourbon comes from Kentucky and the other 5% is counterfeit.

Right around 2007, Louisville marketers realized there was growing interest in the barrel-aged, corn-based spirit, said Stacey Yates of Louisville Tourism.

Life sized statue of Col. Sanders in Louisville visitors center

Louisville had lost its distilleries during Prohibition, so began marketing itself as the Gateway to the Bourbon Trail. But since then, she said, 10 distillers have opened in the city. Bourbon aficionados come from all over the world. Someone described the city’s food and whisky scene as “the new Bourbonism.”

With that, plus two convention centers, Louisville has become a year-round destination, Fischer said. For teetotalers there are galleries, museums and a very active performing arts scene — symphony, ballet, opera and the nationally renowned Actors Theater. Many visit lovely Cave Hill Cemetery, often to visit the final resting place of either Muhammad Ali or Colonel Sanders, one of posterity’s more unusual pairings.

Challenges remain

Louisville still faces challenges of course. A 2018 study by the nonprofit Greater Louisville Project comparing the city to 16 peer cities — Charlotte, Nashville, Indianapolis, Cincinnati and others — on jobs, health, education and quality of place found Louisville in the middle of the pack, strong on jobs and quality of place, less so on health and education.

The city, like many others, also has a problem with homelessness and panhandling.

One way the city is trying to deal with the latter issue is a program called Positive Change, in which people drop money into an outdoor collection box instead of giving it to panhandlers. The money then goes to agencies who serve street people. Compassion is one of Mayor Fischer’s goals for the city, along with health, innovation and lifetime learning.

As for the merger, it doesn’t come up much anymore.

There is still some periodic grumbling about taxes, and some early opponents such as Savitch still think it was a bad idea. But there is no effort to reverse it, which suggests most people think the part-local, part-regional city is headed in the right direction.

Abramson said such a substantial change has to be evaluated over time.

“Look at Nashville, Indianapolis and Jacksonville,” he said, “and tell me it doesn’t work.”

The Cities Project, a collaboration between CT Mirror, Connecticut Public Radio, Hearst Connecticut Media, Hartford Courant, Republican-American of Waterbury, Hartford Business Journal, and Purple States, will publish periodic articles exploring challenges and solutions related to revitalizing Connecticut’s cities. Send comments or suggestions to ehamilton@ctmirror.org.

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