Carter County has one of the lowest property tax rates in the state of Kentucky.

While that's probably a good thing if you are a property owner, it means the county has had a hard time meeting all of the county's needs.

Road improvements, pensions and benefits for county employees, and even payroll have suffered from the county's thin wallet. The county has taken action several times over the last two years to move certain employees from full- to part-time workers to help offset rising costs, and it isn't expected to get any better, judge executive Mike Malone explained.

“Pension costs will raise from $250,000 in 2015 to $1.6 million in the next five years,” he said.

Though no one likes to hear the word “tax,” he said, he believes the county doesn't have any other option.

It was for this reason, he explained, that the court introduced a new one percent occupational tax during a special session last Wednesday.

The new tax, when passed, will require “every person or business entity engaged in any trade, occupation, or profession, or other activity for profit... to complete and execute the questionnaire prescribed by the Occupational Tax Office.”

The new ordinance, number 835, further reads, “(t)he occupational license tax shall be measured by 1% of: all wages and compensation paid or payable in the county for work done or services performed or rendered in the county by every resident and nonresident who is an employee,” and “the net profit from business conducted in the county by a resident or nonresident business entity.”

The new tax will also apply to “partnerships, corporations, and all other entities where income is 'passed through' to the owners,” and will be “assessed against income before it is 'passed through' these entities.”

The tax does not apply to banks and trusts, compensation received by National Guard training, precinct workers for election training or work, those issued a license to manufacture or traffic in alcoholic beverages, insurance companies, profits from investment funds, domestic services, or those engaged in agriculture who employ fewer than five full-time employees. It also doesn't apply to compensation from renting or leasing of residential units or funds received under the tobacco transition payment program.

Malone said that in addition to meeting the county's needs for funding road improvements, the new tax was “the only practical way to pay the ever-increasing pension costs, make our sheriff's office a fully functional law enforcement body, and provide for a reserve fund that can be used for disasters and calamities.”

Sheriff Jeff May, who has come to the court multiple times explaining that he is losing staff to other communities because of the low pay of his deputies, told the court, “This has been a long time coming.”

Magistrate Brandon Burton, fifth district, said he “thought the (budget) was low when he came in (to office),” but that he has watched it progressively worsen since then.

Malone noted that the drop in the Kentucky gasoline tax has had a huge impact on the county's budget. In 2015, he said, the county lost $400,000. Over the last five years, he said, that loss has grown to $2,000,000, and “it never came back.”

“We have pinched pennies, cut back everywhere we could, all while the costs have gone up on everything we need,” Malone said.

For example, he noted, asphalt needed for road paving and repair has raised from $68 per ton in 2014 to $95 a ton or more this year.

The county has also experienced several weather related natural disasters, the least of which costs $500,000 and the priciest over $1,500,000 each year. While they can be reimbursed up to 80 percent of that costs in FEMA approved emergencies, those funds take time to be returned to the county, and they need the money up front before they can be reimbursed.

People are often angry about the slow response time in fixing things like slips and flooding damage, or road improvements, he said, adding, “I don't blame the people for being angry.”

Malone said while he knows a new tax won't necessarily be popular, he hopes the county understands the necessity of it, and that they will see real improvements coming from the extra funds the county collects.

“Since this fiscal court has been in office, we have searched for a way to provide what the county wants, expects, and often angrily demands,” he said. “Our only other alternative is to ignore the problems, present and future, and do nothing. There are no grants to help. No windfalls or large sacks of cash to drop into our lap. If we want better than what we have, it has to be paid for.”

Malone said that because road improvements and repairs are among the most requested, he would like for the court to set a plan for claycreting or paving roads, up to three years out, so that people can know where the money is going and see when it will benefit them.

The court will hold another special session on Oct. 18 at 6:30 p.m., where they expect to hear any citizen concerns and either pass or table the new tax ordinance. Malone is hopeful that the county will understand and that the ordinance will be passed.

“(This will) give us the money to do a whole lot more than we could before,” he said.

Contact the writer at jwells@journal-times.com.

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