Occupational tax hearing sparks exchange between elected officials

By JIM BROOKS
Nelson County Gazette

Friday, June 03, 2011, 1:14 a.m. – A public hearing to discuss raising the city’s occupational tax sparked some sharp exchanges between two of the county’s top elected officials – Bardstown Mayor Bill Sheckles and Judge-Executive Dean Watts.

Bardstown Mayor Bill Sheckles makes a point while discussing police protection and the proposed 2011-12 budget.

Sheckles opened the meeting with an overview of the city’s revenue sources, and the reasoning behind the need to create more revenue.

The city’s occupational tax of ½ percent applies everyone who works inside the corporate city limits. Income up to $15,000 is exempt from the city’s tax but falls under the county’s occupational tax. The city occupational tax is currently capped at $75,000 of income.

TWO TAX PROPOSALS. Sheckles brought two proposals to the hearing. Both proposals include elimination of the cap on income subject to the city’s occupational tax.

The first proposal would keep the tax rate of ½ percent the same; however this proposal would also eliminate the exemption on income under $15,000. In effect, taxpayers’ first $15,000 of income would be subject to both the city and county occupational taxes.

The second proposal is to double the tax rate to 1 percent of income. This proposal would keep the exemption on income under $15,000.

JUDGE-EXECUTIVE OPPOSES TAX HIKE. Judge-Executive Dean Watts sat in the front row of the hearing and remained silent as Sheckles opened his comments and explained why he believed the tax hike was needed.

When Sheckles opened the session for comments, Watts asked to speak.

Nelson County Judge-Executive Dean Watts spoke against a proposal to double the City of Bardstown's occupational tax. Click here to read the full text of Watts' remarks.

Watts opened with an apology to Sheckles and the assembled council “for the anger in my tone of voice and the anger in my heart.”

Citing the rising cost of gasoline, rising utility rates, insurance and other costs, Watts told the council, “Families in Nelson County are struggling.

“Adding any additional burden on the working middle class is wrong, especially now,” he said.

Citing Sheckles’ comments that other cities the size of Bardstown had higher occupational tax rates, Watts said that fact didn’t justify raising the local occupational tax.

“The more money government gets, the more we spend,” Watts said. “Raise my water bill to meet your needs, raise the other city services to meet their needs, but raising the occupational tax on the backs of the working middle class is wrong!”

“I respectfully ask you to consider living within your means, just like the working middle class families do each and every day,” he said. “The city will survive and we will prosper together.”

Sheckles listened while Watts spoke, then asked him at the end, “Are you willing to give some of the county’s occupational tax to help the city balance its budget? Watts answered with a simple “no.”

Sheckles said he didn’t like to pay it anymore than anyone else did, and that those who will be impacted by the tax hike are the fortunate ones who have jobs and can pay the taxes.

“If you aren’t fortunate enough to make an income, you won’t be paying the tax,” he said. Sheckles said he and others with jobs in the city can thank God they have a job and thank God they have the income they do, to which Watts shot back “and you can thank God you have government who can take everything you get, too.”

WHY MORE REVENUE? Sheckles explained that costs for the city continue to increase while tax revenue is flat. The city’s debt service has grown over the years to pay for a new sewer treatment plant and water treatment upgrades. The city had to also pay the costs to meet the agreed order regarding sewer overflows.

Councilman Roland Williams reads over information about the proposed occupational tax hike prior to the start of the public hearing Thursday, June 2, 2011.

For many years, the city’s electric utility has helped fund the city’s general fund expenses. The general fund pays for services that are needed but do not produce revenue – including police and fire protection and street repairs.

“No one in here isn’t intelligent enough to realize that if the city is to continue to grow and enjoy the quality of life we have, it comes with a cost,” Sheckles said.

Sheckles said over the weekend he changed his mind and had restored to the proposed budget funds of $125,000 for street repairs. He also proposed keeping funding for two additional police officers, and funding to replace two vehicles for meter readers.

The budget would not provide pay raises for city employees. “The best I could do is to try to provide them with the tools to help them do the jobs to the best of their abilities,” he said.

POLICE FORCE GROWTH NEEDED. Chief Rick McCubbin said his department needs both additional officer positions funded in the budget, and could use more.

Police Chief Rick McCubbin discusses the budget and the need for more funding for officer positions.

The department is authorized to have 27 officers, but does not have funding for all those positions. “Right now we’re five officers short,” he said.

This means some days there are only two, sometimes three officers working to patrol 11 square miles and answer calls to the entire city.

“This council and this mayor are having to play catch-up for what should have been done in the past,” McCubbin said. “My position is that I’m trying to get us where we should be.”

BARE BONES BUDGET. “There are no luxuries in this budget,” Sheckles said. “We’ve cut some necessary things, and there are no raises for city employees.”

For anyone to believe that all of the city’s amenities don’t come with a price just doesn’t make sense, he said. People don’t want the city to pull back funding for economic development or recreation. “We could be a no-growth city, but I don’t think that’s what anyone in this room wants,” he said. “They want to be a growing, thriving progressive community – and that all comes at a price.”

Francis Lydian reads an information packet as the public hearing about the proposed occupational tax hike gets under way.

If the occupational tax hike is approved, it will raise approximately $250,000 in new revenue and more than double that in the following year. City CFO Mike Abell said there was no way to estimate the additional revenue that removing the cap may generate, as there is no data available on the number of jobs in the city that pay more than $75,000.

As the hearing neared its second hour, Sheckles suggested the hearing be adjourned.

Sheckles said he was “happy to pay my fair share” of the occupational tax. “I’m doing OK in my community. I can’t pay for Washington, D.C., but here in Bardstown I can do what I need to do.

“I’m not doing the political thing,” Sheckles said. “As long as I’m mayor of this town, it’s my job to do the right thing for the right reason. I’m not here to make points, I’m just trying to do the right thing.”

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