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Citizens protest taxes – DLG: Budget “unsustainable”

Photo by Greg Bird
Protesters marched in front of the Courthouse Thursday evening to show their opposition to the possibility of an insurance tax being levied by the Fiscal Court.


More than 150 citizens crowded the McCreary County Circuit Court room Thursday night as a special called session of the McCreary County Fiscal Court was held to discuss budget issues facing the county.

Due to the larger than normal size crowd, the meeting was moved into the adjacent courtroom to accommodate the people wanting to have their voices heard.

Many of the citizens, who also participated in a demonstration outside the Courthouse prior to the meeting, were present to voice their concerns over the possibility of a tax increase or the imposition of an additional tax on the people of McCreary County.

While lasting nearly three hours, the meeting did not provide any solution to the immediate problem, as no new tax or tax increase was proposed during the discussion. But, it did allow for Judge Executive Doug Stephens to lay out his thoughts on the potential shortfall and assure the citizens the Fiscal Court would look at all possible cuts before resorting to any new taxes.

Photo by Greg Bird Will Rhodes of the DLG addressed the Fiscal Court informing them their only options were to cut expenses, raise revenue, or a combination of both.

The meeting opened with Judge Stephens introducing Will Rhodes and Tom Dodson, Local Government Advisors with the Department of Local Government, who were present to advise the Fiscal Court on possible courses of actions that could be taken to ensure the County has a balanced budget by the end of the Fiscal Year in June.

Rhodes stated they had looked at the financial information provided to them, including expenditures and projected revenue, and determined it was “unsustainable.”

Rhodes acknowledged McCreary County is in a unique situation, with about 70 percent of the land owned by federal government and not generating revenue in the form of taxes, which limits the County’s income.

Their advice to the Fiscal Court was simply that they needed to make cuts, raise taxes, or a combination of both in order to balance the budget.

They also noted debt is not an issue for the County, but it was simply the lack of revenue that was creating the budget issues.

Photo by Greg Bird
Judge Executive Doug Stephens addresses the crowd during the nearly three-hour meeting.

Judge Stephens noted 82 percent of the Jail budget has already been spent with five months remaining in the fiscal year, but every bill the County has been issued has been paid.

But, he warned, with costs projected to remain relatively constant over the next month and revenues not growing, there is not expected to be enough money in the General Fund to keep the bills paid.

Magistrate Roger Phillips asked about a recent ordinance passed by the Fiscal Court, which tacked on additional fees to court filings and other cases.

Court Clerk Othel King spoke up, noting the way the ordinance was written (and presented to the Fiscal Court by the Commonwealths Attorney office) those funds would be remitted to Frankfort and could be only used on Administrative Office of the Courts facilities for upkeep.

Judge Stephens also noted an additional $200,000 short-term loan from the Road Department Fund that would have to be repaid by the end of the fiscal year. Stephens stated the loan was taken out at the start of the year to cover an insurance payment, but that debt was expected to be covered by Payment in Lieu of Taxes from the Forest Service.

“Our hope is things are going to get better,” Stephens said. “We hope to get some unexpected revenue coming in.”

Phillips asked what would happen if the County were unable to balance the budget.

In that eventuality, Dotson replied, the state would take control of County finances, cutting non-essential services and shutting down other functions until the budget is balanced.

Several citizens began to attempt to ask questions at that point, but Judge Stephens cautioned the special meeting could only address issues included on the agenda, and the DLG representatives were only present to answer questions from the Fiscal Court and urged people to come to him personally to speak.

Stephens stated the Fiscal Court was against raising taxes, but noted the possible necessity of doing so. He also said they would not take actions to make budget cuts, such as deputy funding and ambulance service, that would hurt the citizens.

After about 50 minutes Judge Stephens allowed the DLG representatives to leave and opened the meeting to hear comments from the public.

Many of the comments expressed concerns over the proposed insurance premium tax, which many said would unfairly tax a smaller portion of the population, while others said the possible inclusion of health insurance as part of the tax would put citizens at risk of dropping coverage due to the expense.

Discussion also concerned the jail situation, with Judge Stephens reiterating his belief that building a new jail would not be the best possible solution for McCreary County.

Stephens advocated coming to an agreement with Whitley County where McCreary could help finance an expansion of the existing jail facility with the express purpose of housing local prisoners.

Sheriff Randy Waters stated if Whitley County were to accept local prisoners again, he and his deputies would take over transport duties, which would eliminate some of the cost.

Other topics discussed over the remainder of the meeting included ensuring all occupational taxes are collected, increasing job and business opportunities in the county and combating the drug problem.

The McCreary County Fiscal Court is expected to meet on Tuesday, February 7 at 6:00 p.m. for their regular meeting.

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