Tax increase passes first reading

McCreary County workers could soon see an extra chunk taken out of their pay checks after the Fiscal Court passed the first reading of an increase to the occupational tax ordinance, raising the rate by an additional half percent.

The reading passed by a 3-2 vote, with Magistrates Jason Mann, Duston Baird and Judge Executive Doug Stephens voting for and Magistrates Roger Phillips and O.L. Perry voting against.
A second reading of the ordinance will have to be held before the increase can take effect. A special called meeting has been set for March 23 at 6:00 p.m.
As opposed to previous meetings where lengthy and often adversarial public comments dominated the discussions, Thursday night’s meeting was much more subdued as acceptance of the apparent need to generate additional revenue to cover what is projected as at least a $300,000 budget shortfall by the end of the fiscal year was apparent.
The occupational tax was not on the agenda, but Judge Stephens included an item simply titled: “discuss budget issues.”
He opened by stating he had said all he needed to in previous meetings, and noted the increasingly desperate times the County is in.
“It looks pretty bleak,” Stephens said. “After today there is only about $19,000 left in the budget for housing prisoners.”
“We are a month away from chaos,” he added, noting the possibility of mismanagement and malfeasance of office charges being possible for the Fiscal Court if no solution could be found.

“We really need to do something,” he said. “I think our only option would be to raise revenue.”
Stephens reiterated the biggest problem facing the County is the requirement to house prisoners. That cost, about $80,000 per month, is quickly eating up the majority of what little revenue comes in.
The unfunded mandate to house prisoners puts McCreary County in a difficult position. Without a jail of its own, the County has to contract with other facilities to house the inmates.
The Judge noted he did not think those other facilities would be willing to take county prisoners without payment, so there needed to be some action taken to generate additional funds to pay for the housing.
Stephens said the only significant budget cuts he could see making would affect necessary services, such as EMS and 911, and would cause more harm than good.
Magistrate Jason Mann reluctantly made the motion to increase the Occupational Tax rate by half of one percent, noting he had thought the budget situation wasn’t as bad as had been reported.
“I was hoping we could ride it out,” Mann said. “But something’s going to have to be done.”
After examining the budget and discussing the finances with the County Finance Officer and Treasure, he said he realized there was no way to make the budget work before the end of the fiscal year.
His motion included a caveat to dedicate the additional revenue to paying Jail costs. Magistrate Baird seconded the motion and it was called for a vote.
Magistrate Phillips, who voted against the increase, said the Fiscal Court needed to find a solution to the jail costs, rather than throw money at it.
“It’s not fixing the problem,” he said.
Roger Phillips also requested an opinion from County Attorney Conley Chaney verifying his belief that the occupational tax revenue from the Southeastern Kentucky Business Park in Corbin can be placed in the General Fund, and not dedicated to the Economic Development fund as previously stated Phillips asserted, and Chaney conditionally agreed, that since the County’s occupational tax revenue is placed in the General Fund, the revenue from the multi-county industrial park should also be able to be added to the General Fund.
Chaney stated he would get a definitive answer on the question before the next meeting.
If possible, it would mean about $25,000 could be used toward future housing bills.
No further discussion on the tax was held until the citizen participation portion of the meeting when several individuals spoke out over the issue.
Citizen Jim Crabtree expressed his concerns over lack of economic progress in the county and the focus on tourism development over the past years, which he believes contributed to the budget problems.
Crabtree stated he believed more efforts should be placed on adding jobs instead of promoting tourism.
“We are going to park that tourist bus and bring a factory here,” he said.
In other actions Thursday the Court approved a resolution applying for a Recreational Trails Program Grant.
Deputy Judge Andrew Powell explained the grant, which would require a 20-percent match of in kind labor from the County.
Powell noted the state would pay for construction of bridges and other assorted items, while the County would provide their match through the use of volunteers building the trails themselves.
Magistrate Phillips expressed his concern over the local match, noting he wanted it guaranteed that it would cost the County no money. Powell stated the resolution contained language that it would be an in-kind match only, and the Court would have to approve any expenditure if any came up, which he didn’t expect to happen.
Magistrate Mann motioned to approve the resolution with the addition of no County funds to be spent on the project. The motion passed 5-0.

The Fiscal Court also approved the State Transportation Cabinet’s proposal for Rural Road Improvement, which would spend about $600,000 to do road improvements on four roads in the County.
The next regular scheduled meeting of the McCreary County Fiscal Court will be on Thursday, April 13 at 6:00 p.m. Again, a special called meeting has been set for March 23 at 6:00 p.m. for the second reading.