Mayor voices frustration after committee fails to reach occupational tax consensus

By JIM BROOKS
Nelson County Gazette / WBRT Radio

Friday, Aug. 28, 2015, 11:55 p.m. — The Bardstown City Council’s Finance committee met Friday afternoon to agree on an occupational tax recommendation the full council might approve at its Sept. 8 meeting.

After more than an hour of discussion about funding needs and possible tax changes, the meeting ended with more questions than answers and no recommendation — beyond removing the occupational tax’s $100,000 cap.

Finance committee members Bobby Simpson, Fred Hagan, Chief Financial Officer Tracy Hudson and Mayor John Royalty were joined by councilwoman Kecia Copeland for a discussion that Royalty hoped would lead to a recommendation to the full council on raising revenue for the city’s general fund.

After the meeting, Royalty expressed his frustration about the committee’s failure to reach a consensus.

“We have some council members who are making decisions based on next year’s election,” he said. “They are already running for re-election. They aren’t being business-minded and basing their decisions on what’s best for the community as a whole.”

Councilwoman Kecia Copeland talks with the city council’s Finance Committee Friday afternoon about the need to raise or modify the city’s occupational tax. Copeland said she was in favor of removing the tax’s $100,000 cap .

The city has $12 million in unrestricted reserves, part of which are being used to fund the general fund for the 2015-16 fiscal year. And while the city can use its savings in this manner, its ability to do so is limited by several things, Hagan said.

While the council could avoid any sort of tax increase this year, doing so could place the city’s financial stability at risk. Hagan pointed out that even if an occupational tax increase is approved, it will be 18 months before the city collects a full fiscal year’s worth of revenue. For example, if the council approves raising the occupational tax rate from .5 cents to .75 cents per dollar of income, it will be effective Jan. 1, 2016. The city would collect six months of new additional revenue before the fiscal year ends on June 30, 2016.

Hagan once again expressed support for raising the occupational tax rate from .5 to .6 and removing the $100,000 cap. He estimated such a move would raise approximately $600,000. The council could review the the budget needs next year and then take action if an additional tax increase is necessary, he said.

Raising the tax to .75 raises nearly $1 million of additional revenue. While that is more than needed to fund the budget, the extra money would reduce the amount of utility revenue necessary to fund the general fund or spent on street and sidewalk repairs.

Hagan said he wasn’t in favor of raising more revenue that is necessary.

Copeland said that since the city has funds and could go without raising any taxes this next year, she would prefer the council simply remove the $100,000 cap from the occupational tax. While there’s no way to predict how much revenue that would generate, she said it would allow the council time to get an idea how much revenue the move will generate. The council can then determine if a tax rate increase is necessary.

Councilman Bobby Simpson asks Tracy Hudson, chief financial officer, a question about the utility revenue transfers at Friday’s meeting of the Bardstown City Council’s Finance Committee.

Royalty told the committee raising the occupational tax rate to .75 would provide a known amount of revenue that the city needs to support the budget without having to consider raising taxes next year.

“The longer we put off raising the tax rate, the longer we’ll have to wait to see any benefit from it,” he said.

Hudson was concerned about making changes to the occupational tax rate year-after-year because it each change requires the city to contact all the employers in the city and advise them of the changes. She also told the council that the police and fire department budgets typically grow 8 to 10 percent a year.

“What i don’t want to do is tax someone once, and then come back and tax them again the next year,” Copeland said. “Put yourself in the position of someone making $15,000 or $20,000, and your going to say ‘We’re going to do a small tax.’ Well any extra tax is not a small tax.”

Copeland said she didn’t have a problem voting for a tax increase that’s needed.

“What I have an issue with is not informing the people its going to happen to, and the people who are actually going to pay it. Why can’t we move our council meeting to another facility and be brave enough to answer questions that are given to us?

“Why can’t we provide concrete information to the people of what we’re doing and why we’re doing it?” she asked. “We don’t have to do a paid advertisement to get the information out, we can hold a meeting. The way we’re presenting things just is not kosher.”

Royalty said he hasn’t received any complaints from city residents about the occupational tax hike discussions.

“You have to remind yourself you’re elected by city residents, not county people,” he said. “County residents use as much or more of the resources here in the city.”

Jessica Filiatreau, city civil engineer told the council about emerging needs for street paving and sidewalk repairs.

Copeland said if the city is behind on street and sidewalk repairs, the council needs to know why and the type of funding needed.

Royalty said streets and sidewalk funding has been neglected in the past, and the city’s engineering staff are putting together a list of needed repairs and the estimated costs that will be presented the council.

At Hagan’s suggestion, the committee approved a recommendation to ask the council to delay taking action on a tax increase until the city staff can present the information on needs.

“I think we would all feel better about the decision we make if we have this information,” he said. “I don’t think we’re going to a consensus on recommending a rate, but I think we can on getting this information so we can review it.”

NEXT UP. The council’s next regular meeting is 7 p.m. Sept. 8, 2015.

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