As one city is looking at a huge financial hole and another city is considering whether to change its percentage, now might be an excellent time for all the parties to study the current insurance premium tax setup.
Over eight years ago, Bullitt County officials took the plunge to impose a 5 percent tax on insurance premiums. Since that time, seven of the eight cities have opted to take a portion of the county’s tax.
When deciding to take a portion or all of the tax, there were different sentiments.
Pioneer Village already had the tax in place to pay for tornado recovery from 1996.
Other cities cited factors such as needed revenue, their lack of cooperation from the county and their desire to get a little money back for their residents since they are also county taxpayers.
The county needed the funds, which have grown to around $2.6 million annually, to pay debt service on a new detention center, renovated courthouse and other items. It has become a vital part of the budget.
Shepherdsville is undergoing well-documented financial issues. It is currently taking 3 percent of the tax and could opt to take 2 percent more.
Mount Washington is at 4 percent and is looking at taking the full amount.
Hillview, the only city which reached another form an agreement, is not taking the tax but is guaranteed at least $100,000 annually.
At a time when there appears to be much better cooperation between the cities and county government and at a time when some of the cities are carrying forth some very nice surpluses, the opportunity might be ripe to sit down and talk.
When state and federal governments are going through tough times, the Shepherdsville situation doesn’t seem to be that shocking. Spending more than you bring in is a major problem.
Adding taxes is not the solution. But we also know that the county could not survive without the insurance tax.
However, looking at the possibility of realigning the current taxes collected could be worthwhile. Only the cities know what they need to operate. Only those leaders know if giving the county back 1 or 2 percent on the insurance premium tax would be a doable thing. Or maybe county government needs to tighten its belt and the current tax setup is fine.
We just think in this new spirit of cooperation that it would be an ideal time for the leaders to get together and talk about the issue.