HAZARD — At the Nov. 15 meeting of the Perry County Fiscal Court, Judge Executive Scott Alexander, along with Magistrates Keith Miller, Ronald Combs and Kenny Cole, discussed the possibility of passing a 1 percent payroll tax on workers employed inside Perry County. The tax was struck down at a previous meeting. However, it seemed likely on Nov. 15 that the measure would receive a majority vote in favor of passage. As it turned out, the yes votes did indeed receive the majority this time around.
Although he voted yes during the previous meting, Judge Alexander began the discussion by voicing disapproval for the notion that he stands as an advocate for the tax.
“Nobody wants to be put into this spot,” said Alexander, “I think it was reported in the Paper like this is something I really wanted to do. Nobody really wants to do anything that will cause a hardship and a burden on the community, but we was faced with the hand we was dealt, and we have a major loss of coal severance money. We are kind of at the point in Perry County where; do we want to go forward and help people maintain roads, parks and recreations, the jail, the Senior Citizens Program, the Animal Shelter, our Volunteer Fire Departments, or do we want to basically about shut down to where we can’t help anyone at all. There were a lot of past due bills that we’ve addressed. There wasn’t the finances in there to pay them. We’ve made a lot of cuts along the way to get to this point here, but it still ain’t enough to cut our way out of this. One of the things I’ve mentioned before, probably 30 percent of the workforce in Perry County lives in other counties. They use our services, they use our infrastructure. If they wreck, they call our fire departments and our ambulance service. They call our city police and if the city police has to arrest that person, they end up in our jail. It’s a great burden on us to consider this. It’s not something anybody wants to do, but we are at crossroads. Which way do we want to go in Perry County? I called (The Dept. of) Local Government in because I knew we were in a financial crisis and I wanted to ask for their help. I called the Dept. of Local Government in, and I said, look, I’ve tried everything I know to do and we need help. With that, we got a letter from the Dept. of Local Government on recommendations of what they suggest we should do. And this is what they suggest we do as well.”
The Dept. of Local Government did visit Perry County to discuss the financial crisis with the Fiscal Court. The Fiscal Court gave the Hazard Herald a copy of the letter that the Dept. of Local Government sent in response to the situation. The first 2 paragraphs of the letter state:
“Under KRS 68.210, the State Local Finance Officer, within the Kentucky Dept. for Local Government (DLG), is entitled to investigate, examine, and supervise the accounts and operations of all local government and local government officers. After thoroughly reviewing the Fiscal Year 2017 budget of the Perry County Fiscal Court, it is evident that the county’s financial state is not sustainable as it is.”
“After speaking with the Judge Executive and the members of the Fiscal Court, individually, it has become clear that further budget reductions cannot be made without drastically reducing the services that the citizens of Perry County need and deserve. As evidenced by the recent staff and constituent services cuts, the county needs to identify and utilize new revenue streams in order for it to operate effectively.”
Joseph Engle attended the meeting to address the court as a citizen.
“I talk to a lot of people in the community,” Engle said, “I guess my question would be; of course nobody wants to be taxed, like you stated, but I understand the importance of, when it snows, I don’t want people stuck in the holler and not be able to get out because I am pretty sure we are in a spot right now, where we can’t afford to clear our roads, or buy gravel or blacktop. I’ve talked with the judge. We’ve met with him several times and we are in dire straits here. It’s not popular. I’ve talked to a lot of people, and it’s not a political move you want to make because it will hurt you all politically, voting on any kind of tax. I guess my question is; where will we be when the tax is in place? What will the funding look like? We will be back to the spot to where coal severance was at its peak?”
Judge Alexander stated that the tax would bring Perry County back to where the county was financially at the peak of coal severance tax revenue. Alexander acknowledged that a majority of county roads are in bad shape and pledged the tax would help solve much of this problem. A maintenance program that does work, such as properly ditching the roads, is another initiative Alexander touted as beneficial. Alexander predicted that the tax revenue would provide money to help recruit new businesses to the area and he declared that the community will see the growth.
Engle also asked how much money the tax will generate, and he wanted to know if fire departments would once again receive a stipend like the $10 thousand they were given annually at the height of coal severance.
Alexander said the tax would produce a little more than $4 million a year. He also stated that he hoped to give $2,500 each quarter to the fire departments, taking time to commend volunteer fire fighters for their service to their communities.
DLG said in the third paragraph of their letter to the Fiscal Court:
“DLG proposes three (3) options for the County to consider in order to bring revenues to a sustainable level. The first is to enact an insurance premium tax. This option would, however, take over a year for the County to yield any monetary gain. The second is to raise property taxes. Property taxes can only be raised incrementally, though, so the County would not realize any revenue from this option until late FY 2017. The third option is to enact an occupational tax. It is estimated that this option, with an enacted one (1) percent occupational tax, would generate $4,425,910 each year for the County.”
Judge Alexander, once again, as he had done in the previous meeting, advocated the advantages he sees in choosing the occupational tax to relieve budget strains, as opposed to other options.
“Like I said before, 30 percent is going to be generated by people who don’t live in Perry County, but use our infrastructure and come here to work.”
Alexander also mentioned that this ordinance would allow Perry County to tax outside contractors who do work in the county, which is something the Fiscal Court had not been able to do before.
Alexander and Combs voted yes in the previous meeting to passing the tax, and seemed determined to stick with their stances. Miller also seemed determined to stand by the no vote he cast at last month’s meeting. If Kenny Cole voted no, the tax would once again be shot down. Changing his vote to yes, would assure the tax’s passage. Kenny Cole had the last word before the votes were delivered.
“First time this came up, I voted no,” said Cole, “After talking to (The Dept. of) Local Government, they said, it’s our duty to protect this county. I can’t see any other way of doing it right. He said, if you just let it go, people are going to be laid off. I don’t want to see that happen. I don’t want to see taxes. That’s a really big burden on me, but I can’t see any other way around it. If we let it go, and it get’s so bad, they’ll come in and take over, and they’re going to make us do it anyway, or they can find us in contempt is what they told me. So, I don’t see any other choice.”
The motion for a 1 percent occupational tax in Perry County passed, with Alexander, Combs and Cole voting yes. Miller voted no. There will be another reading of this ordinance at another meeting in the near future. If the motion passes again, it will become law.
Sam Neace can be reached at 606-629-3243 or on Twitter @HazardHerald.