Source: Sunset clause not allowed by KRS for occupational tax ordinance

STAFF REPORT

Tuesday, June 28, 2011, 4:45 p.m. — The Bardstown City Council will meet at 7 p.m. tonight to hold second reading on the 2011-12 budget and — perhaps — entertain a new motion for an occupational tax ordinance that will include a one-year sunset clause.

The Gazette’s sources indicate however that the city has been given legal advice that in this particular instance, a sunset clause will not be allowed by state law. The exact statute was not given by the source, but the meaning is clear — if the source is correct, state law will prohibit adding a sunset clause to the occupational tax ordinance.

Two weeks ago, Councilman Tommy Reed proposed a two-year sunset clause for the proposed changes to the city’s occupational tax. That measure died without a second. The idea of a sunset clause was brought back up at a special working session last Tuesday by Councilman Fred Hagan. He proposed a one-year sunset clause for the changes to the city’s occupational tax, which will double the city’s occupational tax revenue.

The proposed 2011-12 budget is based on increasing occupational tax revenue; the viability of adding a sunset clause provision remains in doubt.

SUNSET CLAUSE IN RUSSELL COUNTY. If KRS prohibits city government from using a sunset clause, it did not stop Russell County, Ky., Fiscal Court from adding a sunset clause in April when it made changes to is occupational tax ordinance.

According to the Russell County Times-Journal, Russell Fiscal Court raised the occupational tax rate and added a two-year sunset clause that will expire on April 1, 2013. The county raised the rate but capped total occupational tax revenues at $800. The occupational tax will return to its previous level if the Russell County Fiscal Court makes no changes to it by the deadline.

Click here for the full story in the Russell County Times Journal.

-30-