Editorial: With its budget set, city council has no choice but raise occupational tax
By JIM BROOKS
Nelson County Gazette / WBRT Radio
Monday, Aug. 24, 2015 — My hat is off to those who showed up last Friday to voice their opinions on moves to increase the city’s occupational tax rate. They exercised their right to freedom of assembly and speak their minds in public — its a right most of us take for granted.
A volunteer prepares protest signs at Friday’s tax protest at the Old Courthouse.
At issue is the city’s pending move to raise revenue to pay for its first 24/7 fire department by hiring an additional seven full-time firefighters. None of us want to pay higher taxes, and the council and its finance committee have been discussing how to raise revenue for some time.
While I understand the protesters’ grievances regarding a tax increase, there’s one fact that overshadows the arguments against raising taxes — the council has approved a budget that requires it to come up with additional money for the general fund.
The 2015-16 budget includes funds to hire the additional firefighters and related equipment, but that money — for the purpose of the budget — was taken out of the city’s financial reserves. Tracy Hudson, the city’s chief financial officer, has said city could dip into its unrestricted reserves and fund these expenses for one budget year, but could not afford to do so for a second year.
With the budget is in place, the council’s job is to figure out how to come up with funding that will replace what is budgeted to be spent from the city’s financial reserves. While no one wants to pay higher taxes, the council has two choices: 1.) come up with additional revenue or 2.) cancel hiring the seven additional firefighters.
The reasoning for a fulltime fire department is to reduce response times. When the fire station is manned, the first apparatus leaves the station in 2 to 3 minutes. Between 5 p.m. and midnight, the response slows substantially. Between midnight and 8 a.m., it can take 10 minutes or more to get the first truck out of the station.
Response times aren’t just a number; they represent how quickly first-responders arrive to extinguish a fire, attend to a medical emergency or rescue an accident victim. The mayor and the city council have agreed to make the full-time fire department a funding priority.
With the 2015-16 budget now in place, the council’s job is to pay the piper.
TAXING STRUGGLE. The council has been struggling to reach a consensus on how to raise the needed revenue — and they should struggle with how to best meet the need. Their decisions impact those who live in Bardstown, and the occupational tax affects many who do not live in town. It should not be a decision made lightly.
In 2011, the city council struggled to reach an agreement that each member of the council could live with. That council voted 10 times in a span of seven weeks on six different versions of the occupational tax ordinance before it voted on a version that dropped the low end of the tax from $15,000 to $1, and raised the cap from $75,000 to $100,000 — all while leaving the rate unchanged. The changes netted the city more than $800,000 in additional revenue, with most of that coming from taxing those making less than $15,000.
If there’s any sort of fairness that can be found in the occupational tax discussions, it is the fact that only those who have jobs pay the tax. Pensioners, retired individuals, the disabled or the unemployed are not affected. The same cannot be said for the two new taxes the council has discussed — the insurance premium tax and the utility franchise tax.
The council appears to have no other choice than to approve one of the three tax increases; just how much more people will pay is yet to be determined.
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