The Letcher Fiscal Court this week defeated a proposal to place a six percent tax on insurance premiums in the county. Letcher Judge/Executive Jim Ward said that without the estimated $600,000 plus revenue the tax would have brought in, the court must begin deciding which programs and employees to cut.
After County Attorney Jamie Hatton read the ordinance that would have authorized the insurance tax, several magistrates expressed their disapproval of any new taxes on county taxpayers. Both First District Magistrate Bobby Howard, whose district includes Whitesburg, and Fifth District Magistrate Wayne Fleming, who represents Jenkins and other parts of eastern Letcher County, said their constituents already face a six percent tax rate on insurance premiums in their respective cities, and both voted against accepting the first reading of the ordinance. Second District Magistrate Terry Adams joined them in defeating the motion and said that he did not want to impose any further taxes on the people of Letcher County.
The insurance tax would have addressed just under half of the county government’s projected $1,325,554 deficit, and Ward said he is left with no other option besides cutting programs, benefits, and jobs. Fleming praised Ward’s handling of the county’s budget situation so far, but said he had not voted for earlier cuts including closing county Senior Citizens Centers and centralizing the program to the Letcher County Recreation Center.
Letcher County Treasurer Phillip Hampton told the court he does not know what the county will do for needed revenue between now and October, when property tax revenues start to come in.
“Times are getting tough, and fiscal courts are all hurting,” said Hampton. “Things are going to be really tough if we continue to fund what we’ve been funding.”
Hampton said the court will be required to come up with a new budget by June 30, and even if the insurance tax was passed, they would have to make ends meet until revenue from the tax started coming in in November. County Attorney Hatton said that other coal counties have either passed an insurance tax or an occupational tax.
Ward told the court the Letcher County Sanitation Department is barely breaking even right now and that most of the trucks and other equipment are getting old. Third District Magistrate Woody Holbrook added that cutting services will mean cutting jobs as well. The vote for the insurance rate tax failed with a tie, with Ward, Holbrook, and Fourth District Magistrate Keith Adams voting yes and Fleming, Terry Adams, and Howard voting no.
Following the vote, Judge Ward said he is now faced with deciding what to cut and what services to shut down.
“What do we do? We will start cutting and the county will be shut down,” Ward said.
Ward called a special meeting for today (February 22) to discuss the budget and possible remedies and said he would continue to call such meetings daily until magistrates can agree on a new revenue source.
“I’m going to meet every day until they can tell me something — what we’re going to cut or shut down or figure out a revenue source,” Ward said Tuesday. “I don’t like it any better than the rest of them do.”
Ward said the tax on insurance premiums would cost the average county resident between $40 and $100 a year. A person who pays $1,000 in insurance premiums a year would pay an extra $60 annually to help keep county-funded services going.
Fleming said a representative of his insurance carrier, Kentucky Farm Bureau, told him Tuesday that he already pays $252.44 annually in taxes on his insurance policies, and that it would be doubled if the county’s tax is approved.
“I don’t think the people of this county can stand it,” Fleming said. “It’s too expensive.”
The insurance tax was first discussed at a special meeting last November, when the court appeared instead to go with a relatively long-term approach of taxing natural gas and oil wells in the county at $1,000 each. When asked about the prospects for the gas and oil well tax, Ward said the issue would first have to be decided by the Kentucky Supreme Court and the expected $1,490,000 revenue from the 1,490 wells located in the county would be some time in the coming. At the same meeting in November, Ward also included the option of a one percent occupational tax in the county which he said would raise almost $1.6 million a year, but the magistrates were almost unanimous in opposition that option.
In other business, the Letcher County Broadband Board interrupted their meeting elsewhere in the courthouse to visit the court meeting. Spokesman Harry Collins, a Letcher County school teacher, told the court the board is applying for a U.S. Department of Agriculture Grant to start bringing broadband to areas in the county that are completely underserved by Internet providers. Collins said Phase One of the grant will extend lines from the Red Star Bridge in the southwestern part of the county to the old Southeast Road. He said that part of the requirements for the grant are that it will serve many homes that are currently not served and added, “ You eat an elephant one bite at a time.”
Magistrate Terry Adams, who is the court’s representative on the panel, said the Broadband Committee is the hardest working and most knowledgeable committee he has been a part of, and Judge Ward and the other magistrates joined in praising them as well.
Maintenance Engineer Ken Mullins of the Kentucky Transportation Department brought the Kentucky Transportation Cabinet’s 2017 Rural Secondary Road Program to the court for approval. The total offer from the state is just over $1.4 million and will include paving, replacing, and installing guardrails, fixing road breaks and other maintenance of state maintained secondary and back roads. The court voted unanimously to accept and Mullins told them to keep him informed about their road needs.
The court also heard a request from Ronnie Meeks of Vinland Energy to install a compressor site to help provide pressure for gas lines Vinland owns running alongside the road opposite the Letcher County Recycling Center. Meeks said Vinland will pay the county $2,500 per year for use of the land and that the compressor will be electrically operated and enclosed with a steel mesh fence. The construction will be done locally, by Millstone Construction Company, which is currently working for Vinland on other projects. Meeks said that the work is on an existing line and it will not be invasive in any way. The court voted unanimously to approve his request.
Captain Barry Engle of the Letcher County Sheriff ’s Department delivered the final 2016 Fiscal Settlement. Engle told the court the department had taken in a total of $758,162.33 with disbursements of $756,250.20. This left an excess of $1,912.13 pending the final audit for the year. Engle also thanked Judge Ward for signing off on grants he has applied for to provide equipment upgrades for the department.
The court also voted to honor the following Blackey area veterans by adding their names to the Blackey Veterans’ Memorial Board: Lance Corporal James Flynn, United States Marine Corps, Tech Sergeant Bob C. Williams, United States Army, Seaman First Class Steve Hall, United States Navy, Sergeant Bill Jack Branson, United States Army, and Sergeant Percell Elam, United States Army.
Bank Balances for county agencies as of February 15, 2017:
•General Fund: $548,899.97
•Road and Bridge Fund: $1,033,979.07
•Jail Fund: $27,710.66
• LGEAFund: $537,928.25
•Senior Citizens Fund: $74,143.19
•Forestry Fund: $19,451.94
•Letcher County Public Courthouse Depreciation Reserve: $46,724.53
•Letcher County Public Courthouse Debt Service: $64,016.66