Journal-Times (Grayson, KY)

August 14, 2013

Olive Hill must give itself fiscal stability


Aug. 14, 2013 —     We believe the residents of bankrupt Detroit may have a brighter future in the short term than the people living in Olive Hill.

    Because of its size and impact as Michigan’s largest city, Detroit is likely to be bailed out of its financial collapse.

    State-issued bonds may be used to restructure Detroit’s debt and give it some operating cash for payrolls and the like.

    But there is no sugar daddy standing in the wings to help Olive Hill come up with $60,000 to balance its budget for the fiscal year which began last month.

    Mayor Kenny Fankell is caught between citizens who insist the city maintain 24-hour police protection and those who believe fighting drugs should be the highest priority.

    The idea of reducing efforts to fight illegal drugs is not popular in a city caught in the drug epidemic that has engulfed East Kentucky.

    Removing Olive Hill from FADE for just a year would save the city almost exactly the amount it needs to balance its budget.

    And this would not be the first time it has happened. Olive Hill left FADE for a time before rejoining the task force in 2010.

    Currently, OHPD has a full-time officer assigned to FADE which is opening about eight drug cases monthly in the area.

    While the debate rages over FADE, larger questions about Olive Hill’s shaky city finances remain unanswered.

    The bottom line is that the city’s deteriorating property tax base was hammered by the floods of 2010.

    After the water went down, property owners demanded and received lower tax assessments on flood-ravaged buildings, some of which remain unoccupied and non-income producing.

    The city has fewer businesses to purchase city licenses and to buy utility services from the city. The same is true of population loss since the flooding.

    City-owned utilities are struggling and, by law, that revenue cannot be used for general government expenses like police and fire.

    In our view, the city of Olive Hill should enact a payroll tax which, in effect, is a local income tax paid by workers and business owners within the city limits.

    A payroll tax is fairer than a property tax increase because it is paid by those with the ability to pay, not by those living on fixed incomes.

    It is paid by those who come into the city to work at places like schools, medical clinics, public agencies and other places.

    It works in other cities and it can save Olive Hill.