LJ occupational tax hike considered increased

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No formal vote taken by council members in LJ

By Alex Wimsatt

 LEBANON JUNCTION - For nearly a decade folks working in Lebanon Junction have paid .8 percent of their salaries to the city in occupational license fees or occupational taxes as they’re commonly referred to, but workers may be paying more in the near future if City Council acts on a proposal to raise the rate to 1 percent. 

During the July regular meeting of the Lebanon Junction City Council, councilman Steve Masden suggested increasing the occupational fee rate to help the city meet its obligations and have money set aside for unforeseen expenses. 

Masden’s proposal came after the council approved transferring $20,000 from the occupational fund to the city general fund to cover expenses while City Hall waits for property and insurance premium tax revenue. 

Though the suggested increase and the funds transfer weren’t directly related, Masden said raising the fee would provide additional revenue for when the city needs it.  

Masden said he’s considered proposing a rate increase since his return to the council in January because he felt it was important the city be prepared for whatever comes its way. 

“I saw the spending and I felt it was time to consider an increase,” Masden said. 

Masden mentioned the railroad crossing at the Pilot Travel Center off Highway 61 near Interstate 65, which the city had to pay nearly $15,000 to repair in May after the crossing fell into poor condition due to heavy traffic over the years. 

He also pointed out that the city recently had to commit around $200,000 over the next 10 years to have the city’s water tanks regularly maintained-another expense that was necessary, but not initially budgeted.

“Some things come up that you don’t plan for,” he said. “It would be nice to have a little put back to cover those costs.”

Depending on whether or not the council expresses support for his proposal, Masden said he may ask city attorney Mark Edison to draw up an ordinance before their next regular meeting in August. 

Masden said the city could use the additional revenue, adding that he feels raising occupational fees would have little impact on local residents and no impact on the unemployed or the largely retired senior population. 

“No one wants to talk about a tax increase, but this is something we should consider,” Masden said. 

He’s not the only council member who feels that way. 

Councilman Ozzie Maraman, who has sat on the council since the city began imposing the occupational license fee in the mid 1990s, said he favors raising the rate because it would help the city down the road. 

“It wouldn’t hurt us to have a little more coming in,” Maraman said. “I don’t think people realize what it takes to run the city...All you have to do is look at the payout. It’s not like we’re wasting money. It’s all paid out.”

Councilwoman Allie Phillips said she favors raising the rate.  

“It may get some opposition, but I really think it’s time it was done. I think it would put money in the city’s coffers and keep us in a more solvent position,” she said.

Councilman Larry Dangerfield also expressed support for the proposal, stating that the increase was not significant enough to hurt anyone and that it was important to raise the rate a little now, rather than a lot later. 

“It’s inevitable; we’re going to have to do it sooner or later. The city has so many obligations...eventually they’re going to catch up with us,” he said. 

Dangerfield said he hopes people will look at the big picture and understand that if the city’s going to offer services like those provided by the police department, public works and the fire department, Lebanon Junction needs to have enough revenue to pay expenses and set some aside in case of emergency. 

Councilman Randall Logsdon said he would like to research the issue and learn more about what sort of impact a rate increase would have on those who work in the city, but he said he didn’t feel it would put any hardship on anyone and he supports the idea.

“You hate to raise anybody’s taxes, but sometimes it has to be done to survive.”

While his fellow council members appear to support the idea of increasing the occupational license fee rate, Councilman Tim Sanders is hesitant. 

Sanders said he hadn’t spoken with Masden about the proposal and he would like to find out more about the reasoning behind his proposal before taking a particular stand.

“I haven’t thought about it a lot because he (Masden) hasn’t presented a lot,” Sanders said. “But if we’re going to increase a tax on people just to build a nest egg I’m going to have to have to take a second look at that.”

Sanders said it’s important the city continue limiting spending and keeping a close eye on its finances, but he stressed that Lebanon Junction is in the black and he doesn’t see a need in raising the occupational rate at this time. 

“I’m open minded at this point, let’s put it that way,” Sanders said. “He (Masden) may come up with some very valid reasons...Maybe Steve’s seeing something I’m not.”

Lebanon Junction began imposing its occupational license fee in the mid 1990s primarily to pay for the city’s sewer treatment plant. 

Just under half of the occupational license fee revenue the city collects goes to pay for the city’s sewer treatment plant. The rest is used as a safety net of sorts for various city and water and sewer expenses.

Occupational revenue is stored in an independent account that can only be tapped with the council’s approval.  

The occupational fee is the largest source of revenue for the city and is expected to amount to around $245,000 by the end of the current fiscal year, which began on July 1. 

City clerk Susan Crady said occupational license fee revenue has been fairly consistent, but that revenue has gone down since local printing company Publisher’s Printing downsized its Lebanon Junction operation a couple of years ago. 

When the fee was first imposed the rate was set at half a percent before City Council raised the rate to the current .8 percent in 2001. 

For comparison, Mount Washington and Shepherdsville impose a 1 percent occupational tax, while Hillview imposes a 1.5 percent occupational tax, according to figures from the Kentucky Cabinet for Economic Development web site. 

At Lebanon Junction’s current rate, a person employed in the city of Lebanon Junction earning $400 a week would pay $3.20 of his or her check to the city in occupational taxes. 

If Lebanon Junction’s rate were to increase to 1 percent, that same employee would pay $4.

Council members are expected to discuss the occupational license fee rate during their next regular meeting on Monday, August 1 at City Hall on Main Street. 

The meeting begins at 7 p.m. The public is invited.