Whitesburg KY

Cash-strapped Jenkins debates occupation tax

The first reading of an ordinance that would impose a one-and-a-half percent occupation tax on full-time workers in the City of Jenkins drew some dissension at the May meeting of the city council.

After City Attorney Randall Tackett read the ordinance, Burdine resident Betsy Addington, who presented a petition against the tax at last month’s council meeting, spoke against it again. She said she did not have the petition with her, but she thought the number of signers was 297. Jackie Bentley, who said she is the assistant manager of the Dollar General Store in Jenkins, also opposed the tax, fearing it would hurt several part-time workers.

City Attorney Tackett told Bentley the tax, which would cost a full-time minimum wage earner $4.35 per week, would not apply to part-time workers. Bentley said she works half-time at the Jenkins store and half-time at another, and Tackett said the tax would only apply to the time she works at Jenkins.

The tax as described in the ordinance will apply only to full-time workers in the city at every business entity and will assess a one and a half percent tax on wages that are subject to taxation by the Internal Revenue Service and Kentucky Revenue Cabinet. The tax would not apply to serving National Guard Members, precinct workers in elections, public service corporations, retirement pensions, unemployment compensation, death benefits, workman’s compensation and disability benefits, expense reimbursement, student payments, gratuities (tips), and live performances. Tackett said there are several other categories, but added that the state has passed a bill to set a standard for municipal taxes but the actual forms have not been finalized.

Council members Terry Braddock and Carol Anne Litts both oppose the tax. Braddock asked when the ordinance was discussed by the council and Mayor G.C. Kincer said it had been at a public forum that Braddock had declined to attend. Tackett said the discussions had been held at an open meeting that was duly advertised and Braddock said the matter would have to be discussed in public.

“That’s what we’re doing,” said council member Rebecca Terrill- Amburgey.

Betsy Addington told the council that while she wants to see the city flourish, she feels that people are already overtaxed. She named six other forms of taxation, including the city’s school tax, which she said apply to citizens of Jenkins. Addington said people who work in Jenkins don’t make as much as people in Lexington and said she does not feel it is in the best interest of the city. Terrill-Amburgey asked Addington how many of the people who signed the petition actually pay taxes in Jenkins, and Addington said she doesn’t know.

Litts said she agrees with Addington that people making minimum wage would be disproportionately affected, claiming it would cost them $20 out of a payday. (An individual would have to make $1,333 per payday to see a deduction of $20. A person working a 40-hour week at the federal minimum wage of $7.25 per hour would make $290 per week and see a deduction of $4.35). However, Litts also said that a number of the people who live in the city refuse to buy city auto stickers, and said the city has two boxes of unsold stickers. The proceeds from the sale of city stickers go to city roads and streets.

“We live in a retirement city,” said Litts.

City Attorney Tackett said the tax would not apply to retirement benefits or other benefits that are paid to retired persons. Tackett also pointed out that Beattyville and Elkhorn City, both smaller and with similar demographics, have occupational taxes. Litts asked why Whitesburg doesn’t have an occupational tax and Terrill-Amburgey said Whitesburg has a higher business tax and a professional tax as well. Tackett added that when the state’s regulations are finalized, people who pay city occupational taxes may be able to deduct that amount from state taxes. He said the tax is for full-time, inside-the-city workers and does not discriminate against anybody.

“People who work in the city partake of city services,” said Tackett.

Mayor Kincer pointed out that Jenkins is a city in decline and offered a list of examples, including the loss of Beth-Elkhorn Coal Inc., TECO, Jenkins Community Hospital, Pikeville Medical Center’s Jenkins office, EQT, and Hall Brothers coal. Kincer said the city had passed an ordinance the previous year to allow alcohol sales in restaurants and yet not a single restaurant has located in the city.

“What does that tell you about your city?” asked Kincer. “Why have these people left? We’re going nowhere. We’ve never had the courage to step up.”

Kincer told the audience that as mayor he is painfully aware of the decline in the city’s abilities to serve the public, saying that police cars are in disrepair and that fire and police protection are expensive for any city to maintain. He said grants are drying up and reminded the city that coal severance tax is a finite thing that is getting smaller each year as well.

“This is not an unusual, bad, mean, or exceptional tax,” said Kincer. “This city had better prepare to stand on its own two feet. The things I tell you are absolutely true.”

Kincer said the city is getting by using outdated equipment and by repairing rather than replacing equipment when it breaks down. He said the city purchases used tires for equipment and cannot pay its employees what they are worth because of low revenues.

“Where do you think the money will come from?” asked Kincer.

Council member Braddock interrupted Kincer, saying, “I think we need to see these streets straightened up.”

Amid the laughter of the audience, Kincer said “I didn’t interrupt you, (in earlier remarks) now don’t you interrupt me.

“We have police cruisers so old the interior is falling in,” said Kincer. “And you don’t want to pay to replace it? The school raised taxes by two percent and nobody stood up. We go for one and a half percent and everybody wants to kick the city under the bus. It’s time to stand on our own and prepare ourselves for the future. It’s the only way out, to prepare yourselves for your own destiny. But to your own city, you say no. There is an iceberg dead ahead. I see the iceberg. If anybody has a suggestion for this city to get income, please tell us.”

Braddock suggested the city place a three-percent tax on golf course rental and registration fees and a three-percent tax on restaurant food. Terrill-Amburgey asked, “What restaurants?” Braddock mentioned four — Hardee’s, the Cavalier Restaurant, Double Kwik, and the Raven Rock Country Club.

In other business, the council voted unanimously to enter into a bonding arrangement with the U.S. Department of Agriculture’s Rural Development Agency for a $455,000 bond issue to fund Phase III of the City’s Waterline Replacement Project. In a separate vote, the City paid an invoice for legal services in the amount of $4,290.04 to Louisville attorneys Ruben and Hayes, which specializes in bond issues.

The city opened bids for the swimming pool as well. City Attorney Tackett read the single bid from TSS Contractors, LLC of Westchester and Cincinnati Ohio for $422,485. Mayor Kincer asked the council to accept the bid in negotiation, which he said will allow him to negotiate the price and specifications for the 40 by 80 square foot pool. Kincer said the city had sent specifications out to a lot of sources but had received only the single bid.

Councilman Braddock said he opposes putting the pool on the site of the old Bert Fields property because of what he described as the possibility of water under the property. Braddock asked the city to move the pool to the Gateway Industrial Park and create a complete recreational center there. He said the city could pay for it partially with the sale of surplus property from property seized in blighted and deteriorated situations. Kincer replied that a recreation center would not fit the very specific criteria of the Gateway Industrial Park and the city does not control the industrial park anyway.

Tackett also opened a single bid for repainting the Dave Zegeer Coal Mining and Railroad Museum, but it was tabled in order to make sure the bidder had bid on painting the correct number of rooms.

State Representative Leslie Combs, who still represents Jenkins in the 94th House District, visited the meeting with the news that a new entrance to the city is in the planning stage in the state’s current two-year plan. Combs said the entrance is the result of a visit to Frankfort during the recent session by Mayor Kincer and the entire project should take about four years to complete.

In other business coming before the council:

• The council confirmed the appointment of Officer Thomas A. Bormes as chief of police. Bormes is a veteran of the U.S. Marine Corps and has served the city as a police officer as well. Kincer said Bormes will bring a high standard of courtesy and professionalism to the department.

• In the Supervisor’s Report, City Administrator Todd DePriest reported that both the city water and sewer plants are in compliance with the state Department of Water and said the city transported 113.5 tons of solid waste to the landfill, for a loss of $608.

• The council voted to accept an increase of 6.18 percent in the health insurance plan it currently has for city employees. City Finance Officer Robin Kincer told the council the Kentucky League of Cities said the current plan is the best available for Jenkins and provides the best coverage for the city’s employees.

• Mayor Kincer presented the City Budget for Fiscal Year 2012– 2013 to the council for the first reading. The budget calls for expenditures of $1,980,997 against revenues of $1,880,997.

• The council delayed discussion on a city firearms ordinance until the June meeting. Mayor Kincer said the reason an ordinance is proposed is because someone shot a turkey on the golf course while playing golf at the Raven Rock Country Club, which is a residential area. Kincer also said the city wants Jenkins to continue to be a four-wheeler friendly city but will crack down on underage riders riding dirt bikes on city streets and sidewalks.

• Mayor Kincer announced the Elkhorn Shrine Club’s 4-Wheeler Poker Run will be held at Fishpond Lake on May 19. Sign-up is at noon and the run will start at 1 p.m. The cost is $10 per hand.

• The council voted to allow District Five Magistrate Wayne Fleming to use county funds to improve a city-owned building at the Dunham Park, including adding restrooms.

• Former city employee Anthony Hall approached the council concerning his discharge, but Mayor Kincer told him it is not a council matter. Kincer said that as mayor, he has charge of hiring and firing employees, but added that he would be willing to meet with Hall at a later time.

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