Commonwealth Journal

January 10, 2013

Not so fast: City won’t take tax

By HEATHER TOMLINSON, CJ Staff Writer
Commonwealth Journal

Somerset —  

By all accounts, it appeared the city was positioned to claim its piece of the occupational tax pie — but Somerset Mayor Eddie Girdler, armed with new information, isn’t ready to say the city is taking that step. 
Pulaski County Judge-executive Barty Bullock, Girdler and other officials met in a marathon three-hour meeting Wednesday to discuss the issue.
County officials came out of the meeting under the impression that Somerset was ready to stake its claim on the occupational tax. 
“This won’t be anything less than $5 to $6 million out of our budget,” said Pulaski County Treasurer Joan Isaacs. “We’re very worried that services ... might suffer.”
But Girdler late Thursday evening said that step isn’t in the cards just yet.
“When you bring up these issues, you have to research what’s going on,” said Girdler, who spent most of the day Thursday out of town in meetings concerning the issue. 
An apparent shortfall in the Somerset-Pulaski County EMS budget — resulting from changes in reimbursement from Medicaid, Medicare and private insurance — spurred Girdler’s decision to raise the possibility of the city taking its own tax. 
Isaacs said she and Bullock agree that something needs to be done about the EMS situation. Girdler said the city, established as an overseer of EMS through a 1995 agreement, lost $970,000 for EMS for the last fiscal year. 
Girdler said the city’s first priority will be to sit down with county officials and figure out how to make up those shortfalls.“That is the most important part of this,” Girdler said. “ ... We are definitely going to look to the county to pay us the money.”
Bullock said he’d “be glad” to sit down and try to work something out over EMS. He also said he’s hopeful they’ll be able to find a solution to that problem that doesn’t involve the city claiming it’s part of the occupational tax revenue.
“Hopefully we can work something out where that doesn’t need to happen,” Bullock said. 
That route would have dire consequences for the county’s bottom line.
“We’re already at bare bones,” said Isaacs.
20 percent of the county’s general fund comes from the occupational tax, which was established in the 1980s as a way to bring additional revenue to a chronically underfunded county government. Isaacs said the county collected around $9 million during the last fiscal year, which ended in June. 
If Somerset did pull rank and claim the occupational tax revenue from employers located within the city limits, that would include Lake Cumberland Regional Hospital, the Somerset and Pulaski County school systems, Oakwood, the Kentucky Transportation Department, numerous retail stores, and even the county itself, which has offices located in the old courthouse in downtown Somerset. 
As of right now, the county funds a number of entities through the occupational tax. Lake Cumberland Regional Airport, Somerset-Pulaski County EMS, the Pulaski County Detention Center and Pulaski County 911 all receive funding from the gross revenue of the county’s occupational tax, or “off the top.” 
The airport receives around 2 percent, EMS gets 13 percent, the detention center gets about 5.5 percent, and 911 receives 13 percent. 
After a percentage of gross profits are handed out, other entities are given a percentage of the net profits of the tax. 
20 percent of that revenue goes into the county’s general fund, 20 percent goes to the Somerset-Pulaski County Development Foundation, 30 percent goes into the county road fund, and the remaining 30 percent is divided among the five incorporated cities — Somerset, Science Hill, Eubank, Burnside and Ferguson — per capita. 
Girdler said the occupational tax issue is a complicated one, and he said “it could take up to a year to unravel it.
“We don’t want to rush into it,” Girdler said. “It’s not off the table, we’re definitely going to consider it ... we’re concerned about getting our money, but we’re concerned about EMS.”
Girdler said working out the funding issues for EMS first is “the best course of action we can come up with.
“In 30 to 60 days, we can go into more detail about the occupational tax and how it needs to be restructured,” Girdler said. “Our focus today is to keep EMS running and make sure we keep that service.”
Isaacs said she’s glad  the city doesn’t seem yet ready to claim its chunk of the occupational tax.
“I am thrilled at the fact we can work jointly to resolve this without drastic changes at this time,” Isaacs said. 
She added that the county is ready to sit down with city officials in finding a solution to Girdler’s concerns.
“This is good,” Isaacs said. “We’re moving in the right direction.”