Council OKs changes to occupational tax; starts at $1, capped at $100,000
By JIM BROOKS
Nelson County Gazette
Aug. 2, 2011, 6:30 p.m. — In a special-called 5 p.m. meeting this afternoon the Bardstown City Council ended seven weeks of up-and-down votes with a 4-2 vote on the second and final reading of the city’s revised occupational tax ordinance. There was no discussion about the measure prior to the vote.
Councilmen Fred Hagan, left and Joe Buckman listen during the special council meeting on Tuesday, Aug. 2, 2011.
PAYING MORE. While the tax rate of 1/2 of one percent was unchanged, the measure approved removes the exemption on the first $15,000 of income and raises the cap from $75,000 to $100,000. The city’s occupational tax collection begins now with the first dollar of income produced. The maximum tax the city can collect from someone who makes beyond the $100,000 level is $500.
With the exemption gone, those with incomes below $15,000 will now pay the city occupational tax, as well as those with incomes above that level. Everyone who works in the county is also subject to the county’s occupational tax of 1/2 of 1 percent, which is capped at $15,000.
MOVE TO CREATE MORE REVENUE. The city’s move to drop the exemption on the first $15,000 of income will produce more than $700,000 in additional tax revenue, nearly doubling the amount the city collects. There were no projections available for the amount of revenue raising or eliminating the cap might produce.
The new occupational tax ordinance will take effect Jan. 1, 2012.
TO CAP OR NOT TO CAP. One of the items the council has debated has been the cap on the occupational tax. Mayor Bill Sheckles had proposed removing both the exemption and the cap from the current occupational tax, telling the council that leaving a cap on the tax was unfair.
Former councilwoman Ann Rosalie Ballard addressed the council at its July 12th meeting, asking the council to reconsider OK’ing a tax that removed the exemption on the first $15,000 but kept a cap on the tax.
“I just can’t believe you all really thought this through, I can’t believe you would do this to the ‘Everyday Joe,’” she told the council on July 12. Ballard added that she supported removing the cap entirely to allow those who make higher incomes pay a greater amount of tax.
The council voted against the second reading of that ordinance — which was identical to the one approved Tuesday.
The council approved first reading on changes to the occupational tax three different times — twice on the exact same ordinance — before giving the current one final approval at a special meeting Tuesday.
The city’s finances won’t see the full impact of the new occupational tax until the next fiscal year beginning July 1, 2012. During the current fiscal year the city will collect a half a year in additional occupational tax revenue since the change takes place Jan. 1, 2012.
Look for more stories about the Bardstown City Council’s Tuesday working session elsewhere on the Nelson County Gazette.
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