Commonwealth Journal

News Live

October 22, 2013

Will council rescind tax ordinance

Somerset — While the mayor of Somerset is ready to bolster his city’s coffers in a way that has county government officials deeply concerned, it appears his city council may not feel quite the same.

Out of 12 city councilors, five have told the Commonwealth Journal that they’d prefer to rescind the ordinance they passed earlier this year authorizing the City of Somerset to take a whopping 60 percent chunk out of the county’s occupational tax.

Of those who returned phone calls, another three didn’t wish to comment at this time, and one said it would be a possibility if the country agreed to work with the city more closely hand-in-hand on hammering out a fair deal for EMS service funding.

This means that if someone did propose a vote to rescind the ordinance the council passed unanimously last March, it would stand more than a puncher’s chance of passing.

Last week, Girdler indicated his interest in going forward with the plan of placing a six-tenths of a percent occupational and net profit taxes on workers and businesses within the corporate limits.

With Pulaski County Government relying so heavily on that tax for its revenue, the effects of Girdler’s decision have been called “crippling” to the county, which would end up with only four-tenths of a percent of occupational and net profit taxes generated inside the city. This would leave the county hard-pressed to fund all of its current services, and could lead to an increase in property taxes for its citizens.

 When Somerset starts collecting occupational and net profit taxes, the city will get 60 percent of tax revenues from businesses and workers in the city. County government will get 40 percent. Since a large majority of businesses and employees’ paychecks are within Somerset’s corporate limits, that would significantly impact the approximate $10 million a year that now goes to county government.

On March 11, 2013, the Somerset City Council approved the second reading of an ordinance that would establish a city occupational tax to be levied against the county tax. Girdler said at the time that the purpose of this was “to deal with the EMS issue, to divide up the pot.”

Since that time, there have been attempts to reach a deal to fund the Somerset-Pulaski County EMS service that have been seemingly finalized, and then fallen apart — and both the city and the county have blamed each other for the failure to come to an agreement that sticks.

Though the ordinance passed last spring, not everyone was on board. Ward 1 Councilor Jim Rutherford expressed reservations then, and this past weekend, told the Commonwealth Journal that he’d prefer to cancel that decision altogether.

“As far as I’m concerned, we will propose to rescind (the ordinance,” he said. “... I would rescind it in a heartbeat.”

Ward 11 Councilor Jerry Burnett called rescinding the ordinance a “great idea.”

On Monday, several more Somerset city councilors weighed in. John Ricky Minton of Ward 8 said that if somebody were to make a motion to rescind, then he would vote in that direction.

“Right now, I’m not for taking the occupational tax, but I urge the (county fiscal court) magistrates and the judge-executive (Barty Bullock) to try to work with us on EMS,” he said. “There’s a lot of money the citizens of Somerset are having to put out to keep this (service) going, and (the county) has not stepped up to the plate.”

Ward 6 Councilor Mike New said that his vote would be to rescind as well, but like Minton, would prefer to see everyone come to the negotiating table in good faith.

“Honestly, I think it’s time we all put our big boy pants on, sit down, work this thing out and get it behind us,” said New. “Anyone knows that a city and a county that don’t work together are not going to prosper a whole lot.

Ward 10 Councilor Pat Bourne said that he would vote to rescind because he is “not in favor at all” of the plan to take that much of the occupational tax haul.

“I live in Pulaski County. I’m a resident of Somerset, but that’s still part of the county,” said Bourne. “I don’t like what I perceive as the effects of taking over (so much of) the occupational tax.”

For Ward 3 Councilor Jerry Wheeldon, that decision would be more conditional.

“It all depends on whether the county will work with us or not,” he said when asked whether or not he would vote to rescind. “It’s just a wait-and-see situation.”

That said, “I don’t think we intended to take as much as what it said,” said Wheeldon. “What we’d be taking would be to overcome the losses we are having. I think the city and county need to work together on that. We were trying to work with them and they wouldn’t correspond with us at all.”

Councilors Jimmy Eastham (Ward 4), Donna Hunley (Ward 7), and Jim Mitchell (Ward 9) all indicated to the Commonwealth Journal that they would prefer not to comment at this time.

Councilors Linda Stringer (Ward 2), Jerry Girdler (Ward 5), and Tom Eastham (Ward 12) could not be reached for comment as of presstime.

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.

However, EMS finished the 2012 fiscal year in the red, and was looking at an expected financial shortfall of approximately $585,000 in the coming fiscal year as a result of changes in Medicaid and Medicare.

How to re-negotiate the funding for this crucial county service has been the issue at the crux of the controversy between the city and county throughout 2013.

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