Commonwealth Journal

Local News

January 8, 2013

Somerset looking to take occupational tax, a move that would deplete county coffers

(Continued)

Somerset —

Staring down the possibility of providing that amount yearly to ensure EMS can still operate, Girdler said during a city council workshop meeting Monday that something needs to be done.
“This is a very serious situation,” Girdler said. 
The city’s own occupational tax could be a solution to that problem, Girdler said. City officials estimate that anywhere from 55 percent to 65 percent of the total occupational tax revenue comes from employers within the city limits. Isaacs said that number could be as high as 75 percent. 
“It’s according to location,” Isaacs said.
Should the county decide to structure its own occupational tax, it would be able to claim revenue from all employers located within the city limits. That would mean many of the local schools, Lake Cumberland Regional Hospital, Oakwood, and even the county itself (as its main offices are located in the old courthouse in downtown Somerset) would see the allotted 1 percent of employees’ pay go to the city and not the county. Along with that, employers also pay around 1 percent of their net profit into the occupational tax. That would go to the city as well for those employers located in the city limits.
“I don’t know what we’d do,” Isaacs said. “I really don’t.”
The occupational tax was established in the 80s to aid a struggling county government. Isaacs said that revenue has been the county’s “saving grace.”
Currently, the occupational tax is divided among a number of entities that affect the county and city both. 
Along with EMS, three other entities receive funding “off the top,” or from the gross profit of the tax. The Lake Cumberland Regional Airport receives around 2 percent, and 13 percent goes to Pulaski County 911, and around 5 percent goes to the Pulaski County Detention Center. 
After a percentage of gross profits are handed out, other entities are given a percentage of the net profits of the tax. 

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