Taxes tabled

Upset citizens question Fiscal Court

 

Nothing was accomplished at a special called meeting of the McCreary County Fiscal Court Friday morning, but several concerned citizens were able to voice their concerns over the financial state of the County.

The only item on the agenda was a proposed first reading of an insurance premium ordinance but the 90-minute meeting evolved in to more of a public forum with many in attendance questioning the tax and the reasons the Fiscal Court needed to consider it.

In the end the decision was made to table the first reading until this week, when representatives from the Department of Local Government would be on hand to offer possible solutions to the projected $350,000 budget shortfall.

Magistrate Jason Mann did propose a variation of the ordinance, one that would reduce the percentage taxed on insurance to five percent, eliminating the tax on all health insurance, and allocating all revenue gained from the tax toward building a new jail. That motion died when no one seconded it.

Before opening discussion on the proposed new tax, Judge Executive Doug Stephens took a few minutes to explain his thoughts on the financial issues and his rationale for suggesting the tax.

Stephens admitted the budget passed last June by the Fiscal Court was not truly balanced, but based more on an expectation of lowered prisoner housing costs.

“Was the budget we passed a realistic budget? I’ll be the first to say it was based on a hope and a prayer,” he said.

“The bottom line is it does not appear we were able to bring that cost down.”

He stated the projected $350,000 deficit puts the County in a difficult position, as the Fiscal Court is required by state law to end the fiscal year with a balanced budget.

He then turned to complaints about County employees and their health benefits, noting those who accept the insurance costs about $7,000 per year. He cautioned that if the benefit package were to be changed, meaning employees would have to pay for part of their premiums, he feared many would leave and find work elsewhere.

“County employees are not overpaid,” he said. “Their benefits are not extraordinary. The County pays 100 percent of policy costs for employees. The moment we don’t do that…they will give us up for employment elsewhere.”

“I don’t want the cream of the crop of our ambulance service leaving us.”

Stephens defended the 2012 decision to close the jail, noting if it had remained open the County would have most likely been forced to upgrade the facility to comply with regulations.

He noted since the closure Department of Corrections regulations have changed – requiring more guards on duty, which would have necessitated the hiring of an additional eight deputies, raising the staffing costs by an additional 50 percent.

He estimated operation costs for the jail under those regulations would cost the county about $1.5 million per year, whereas the costs are only about $1 million now.

Stephens said

Stephens continued by noting expenses for most items in the budget have continued to rise, while revenues have dropped, creating a need to generate additional income for the General Fund.

When asked by a citizen what steps he had taken to make cuts to the existing budget, Judge Stephens stated he had made several cuts over the years, such as eliminating extraneous phone lines and combining jobs, as in his Deputy Judges.

When pressed to explain how having two deputies saves money Stephens noted he combined one position along with the part-time Finance Officer position, and the other Deputy works only part-time and is actively bringing in grant funds that actually surpass his salary.

Neither Deputy Judge takes part in the County-offered health insurance plan, he added.

Another citizen questioned the proposed insurance tax, noting the exemptions on health coverage for certain individuals, stating it would put an undue burden on a smaller segment of the community who wouldn’t benefit from the exemptions.

Stephens also admitted to not knowing a breakdown of where possible revenue would come from the insurance tax.

He stated he did not have information as to what portion of the projected revenue from such a tax would come from health insurance as opposed to from home, auto or life insurance policies.

Once passed, Stephens explained, the Department of Insurance would be able to furnish those figures, but before then the County could only estimate the revenue based on receipts from similar sized counties.

After further discussion Judge Stephens called for a motion to accept the first reading of the ordinance, with the exclusion of health insurance from the tax.

Magistrate Mann proposed an alternate motion, one that would not only eliminate the health insurance tax, but would also reduce the rate to five percent and dedicate all revenue to go toward building a new jail.

“”I would beg you not to do that,” Judge Stephens interjected. “That will not alleviate the problem.”

Stephens said dedicating the money in such a fashion would tie it up and prevent it from being used to pay housing costs and other jail related expenses.

Mann was adamant about his motion, stating that was the only way he believed he could vote for the tax.

“That’s my motion and I’m sticking to it,” he said.

None of the remaining Magistrates spoke up to second the motion, so Judge Stephens declared it dead for lack of action.

Magistrate Duston Baird motioned to table the reading of the ordinance until this week, after the Fiscal Court meets with DLG. That motion passed and the meeting adjourned.

A special meeting has been scheduled for tonight at 6:00 p.m. with a discussion on possible budget cuts and solution to budget issues on the addenda.