Commonwealth Journal

June 4, 2013

Magistrates exploring tweaking occupational tax structure

By HEATHER TOMLINSON, CJ Staff Writer
Commonwealth Journal

Somerset —

County officials may soon be tweaking the occupational tax structure to accommodate for additional Somerset-Pulaski County EMS funding.
During Monday’s special-called Pulaski County Fiscal Court meeting, Pulaski County Attorney Martin Hatfield presented the first reading of the occupational tax ordinance amendment.
As with all first readings, no comments are taken, and changes — slight or major — may be introduced during a second reading of the same ordinance. That means the percentages introduced Monday are tentative, at best. 
A number of local services are funded by the county’s occupational tax. Employers within the county are supposed to withhold 1 percent of employees’ pay for the occupational tax. Along with that, employers also pay around 1 percent of their net profit into the occupational tax. That tax funds a majority of the county’s budget.
Four entities currently receive some percentage “off the top,” or from the gross profits from the tax. Those entities are Pulaski County 911, Somerset-Pulaski County EMS, the Pulaski County Detention Center, and the Lake Cumberland Regional Airport. 
If the percentages stand, 15 percent of the occupational tax revenue will go to the county’s general fund that is specifically earmarked for EMS — amounting to $1.4 million. That’s up from 13 percent, which had amounted to roughly $1.2 million for EMS, although that number changed depending on how much tax revenue had been collected. 
Pulaski County Treasurer Joan Isaacs explained during Monday’s meeting that should the $1.4 million threshold not be met, it will be made up through the general fund. She added that anything over the $1.4 will go into the general fund. Those amounts will be at the mercy of yearly occupational tax collections. 
“It will be a flat $1.4 million but ... the 15 percent will go to the general fund,” said Isaacs. “Anything less than $1.4 million will be made up by the general fund for EMS and anything more than the $1.4 million will go to the general fund.” 
The additional EMS funding comes after several months of back-and-forth between the City of Somerset and the county over an issue that began in January after Somerset Mayor Eddie Girdler announced that EMS had finished fiscal year 2012 in the red. City officials, citing guidelines as per a 1995 interlocal agreement, asked that the county cover $982,907 of the shortfall. 
Funding for EMS had been established through the 1995 agreement between the two entities. The county had been providing the $1.2 million yearly to EMS from occupational tax revenue. 
As “overseer” of EMS, the city provided additional funding and managed the operations of EMS. The agreement also stated that additional occupational tax funds would need to cover “unanticipated” shortfalls in the EMS budget. 
After some disagreements between the two entities that included the city’s move to drop the inter-local agreement completely, the city and county are operating again under the 1995 guidelines while they move toward an updated agreement. Pulaski County Attorney Martin Hatfield and Somerset City Attorney Carrie Wiese have both been heavily involved in the process.
Girdler had proposed a contract situation in which the county would pay the city $1.6 million yearly to provide EMS service. That number would be considered the maximum provided by the county, and city officials have stated the city would cover any additional costs after that. 
Should the ordinance amendment introduced during Monday’s fiscal court meeting be passed in its second reading unchanged, 5.5 percent of the gross occupational tax revenue will go toward the detention center, and 1.5 percent will go to the airport — down from its cut of 2 percent. Pulaski County 911’s piece of the pie remains unchanged at 13 percent. 
The occupational tax structure adjustment also affects other entities that receive funding after a percentage of gross profits are handed out to Pulaski County 911, EMS, the detention center and the airport. 
If the ordinance remains unchanged, 26 percent of that net revenue goes into the county’s general fund, 19 percent goes to the Somerset-Pulaski County Development Foundation (down one percent from 20 percent), 25 percent will go into the county road fund (a decrease of five percent from 30 percent), and the remaining 30 percent will be divided among the five incorporated cities — Somerset, Science Hill, Eubank, Burnside and Ferguson — according to population.