Journal-Times (Grayson, KY)

September 25, 2013

Olive Hill Council nixes payroll tax

By Joe Lewis - Staff Writer

Sept. 25, 2013 —

Olive Hill City Council did an about face Tuesday night and dropped consideration of a proposed 1.5 percent payroll tax.

About 60 persons attended the meeting to voice disapproval of the proposed tax on each person who works inside the city limits. A majority of dissenters were school system employees and postal workers.

Those who spoke against the tax said it was unfair to ask those working within the city to pay because residents receiving government benefits wouldn’t be subject to the same tax.

The City Council was clearly divided on the issue.

This community is going to have to make some hard choices. If you don’t want this tax that’s fine, but that means you’re going to lose some of your services,” said Glenn Meade.

I don’t want to go any higher than .75 percent with a tax,” said Jerry Callihan.

I can’t vote for a tax when everyone says no, but we have to find a way to bring revenue into this town. We are the laughing stock of Eastern Kentucky right now,” said Matt Kiser.

I can’t support a tax either,” said Allen Stapleton, who surprisingly changed his position after initially agreeing with the idea of a payroll tax during a July work session.

After nearly two hours of back-and-forth discussion, Council member Glenn Meade moved to withdraw the payroll tax ordinance from consideration. The motion passed unanimously.

Mayor Kenny Fankell then announced that a special revenue committee will be appointed to discuss alternative means of making up the city’s expected $60,000 budget shortfall.

No guarantees were made by the mayor and Council, however, that a payroll tax would not be reconsidered if no other feasible means of revenue generation could be found.

Fankell also stated that if a solution is not reached within three weeks, he would begin taking necessary steps to ensure the city doesn’t exceed its current financial resources.

That likely would mean reduction, or even outright elimination, of the city’s police force, as well as restricting fire department responses to within the city limits.

It’s not something that I want to do, but I don’t have a choice in the matter. As the Mayor, I’m bound by the law to make sure that this city doesn’t spend more money than it takes in each year,” said Fankell.

Which one of us are you going to lay off first?” asked Sgt. Bruce Palmer in response to Fankell’s statement concerning reduction of the police force.

I don’t know if I’m going to have to lay off one, two or three officers,” replied Fankell.

Later in the meeting, tempers flared when Angie Johnson and Jerry Callihan entered into a heated exchange of words with Glenn and Jennifer Meade after both sides felt they had been personally attacked by the other.

Officer Richard Williams quickly intervened with Glenn Meade left his seat at the Council table and moved to confront Callihan in response to comments directed at his wife.

After the fireworks subsided, Council unanimously approved a budget for the current fiscal year that cuts a total of $60,500 across the city’s six major general fund departments.

The Council will hold a special meeting, and a revenue work session open to public input at 6 p.m. on Thursday, Sept. 26, at the Olive Hill Senior Community Center.

Joe Lewis can be reached at or by telephone at 286-4201.