The Times Journal & Russell County News
Wednesday, Apr. 16, 2014 — RUSSELL SPRINGS & JAMESTOWN, KENTUCKY —
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2 year ‘sunset clause’ added to payroll tax amendment
In March 19 Issue
By John Thompson
News-Register Reporter

A special called meeting of the Russell County Fiscal Court was held on Thursday with one item on the agenda; the first reading of ordinance #11-02, an ordinance relating to the imposition and administration of an occupational license requirement, and payment of an occupational license tax by persons and business entities conducting businesses, occupations and professions within Russell County; in other words, a payroll tax increase.

Being a first reading, the ordinance did not require a vote, but there was much discussion among the magistrates, county judge and county treasurer.

The ordinance reads exactly as the measure that was defeated on Monday of this week, with the exception that a "sunset clause" was added. The sunset clause provides that the new tax, which would raise the current rate from .25 percent to 1 percent, would revert to the .25 percent automatically as of April 1, 2013, giving the county a two year window to see what effect the added revenue has on the county budget.

New projections of the revenue raised from the 1 percent increase was amended from $1.8 million to about $1.652 million, based on the most current tax revenues generated. County Treasurer Kathy Tupman went through many budget numbers for the remainder of the fiscal year, ending June 30, 2011, and for the 2011-2012 fiscal year.

With no changes to the current tax structure the county is projected to have a deficit of $1.254 million for the next fiscal year. This number does not include any loan repayment the county will have to receive to make it through this fiscal year, nor does it take into account rising fuel prices or other unforeseen expenses, including replacement of county equipment imperative in effectively functioning as a county.

Tupman later noted that even three-quarters of a percent raise in the occupational tax would only bring in $1.239 million, which is below the $1.254 million projected deficit.

Expenses related to the state mandated building of the new judicial center were also discussed. The county will lose nearly $80,000 a year in rent from state offices currently housed in the functioning courthouse, and possible staffing expenses may be incurred by the county, including janitorial services. Other monthly payments, like water, electricity and maintenance are expected to be reimbursed to the county, who must initially front the payments.

County Judge-Executive Gary Robertson reiterated the point that the county is at a critical point of not having enough funds to "survive from now until July 1 of this year," Robertson said, "$200,000 (reported as $191,000) is just a band-aid to get us through July 1."

This amount would be required to begin the new fiscal year without a deficit, the consequences of which would be the state taking over the county's finances. A prospect that Judge Garner and Magistrate Ronald Johnson indicated would likely have taxing consequences beyond what was proposed, with Johnson saying by his understanding a 1 percent occupational tax as well as a 5 percent insurance premium may be imposed, judging by his talks with state officials.

District #2 Magistrate Brook Cochran had prepared and read for the court an idea to close the new jail, saving the county some $558,000 in doing so, reducing costs from the approximate $1.8 million expected expense of running the jail, to $1.23 million which includes expenses of housing in other counties, transportation and personnel. Judge Garner and Treasurer Tupman pointed out a number of missed expenses, including insurance on the property that would raise the total significantly, though no final total was produced. There was no further discussion of this idea.

Cochran also said he would like to see the current .25 percent occupational fee strictly enforced, noting that not everyone was paying it. There was no understanding of what added revenue this idea would bring.

Judge Garner said he would like an indication from the magistrates how they would vote on the measure in a second reading. During the first attempt at passage of the occupational tax measure ended in a tie, with District #1 Magistrate Greg Popplewell, District #2 Magistrate Brook Cochran, and District #5 Magistrate Larry Holt voting no, District #3 Magistrate Ronald Johnson, District #4 Magistrate Jimmy McQueary, and Judge-Executive Gary Robertson voting yes. Cochran indicated he would likely vote no, while other magistrates, while very reluctant, indicated they would likely vote yes with the sunset clause addition being secured.

There were less than 20 citizens in the 10 a.m. meeting and no one signed in to speak for the first reading.

A second reading and vote on the ordinance is scheduled for March 31 at 6 p.m. at a special called meeting.

The new tax would go into effect April 1 after a second reading and passage as the "sunset clause" would end on April 1, 2013.

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