Story - The Meade County Messenger


Vol. 115, No. 08	February 20, 2008

Insurance tax to pay for Muldraugh police?

By LARRY SEE JR
Messenger Staff

Residents in Muldraugh will have an additional bite taken out of their paycheck, but the resultant hike will mean police protection will continue.

During a special council meeting Friday night, city council members, on a 3-2 vote with members Brenda Carlberg and Ralph Lee casting dissenting votes, agreed to a proposal, offered by member Ron Heschke, that the city take out 8.5 percent of the resident’s insurance costs across the board, with a minimum $5 fee.

According to the Kentucky League of Cities, the insurance premiums tax is a surcharge on insurance premiums paid by insureds for health, life, fire and allied perils, casualty liability and inland marine insurance. The taxes are collected by the insurance agency and remitted directly to the city.

The League also indicated it is difficult to verify the tax liability of each company because the agencies are responsible for self-reporting the taxes collected on the premiums charged. Despite this, this tax generates significant revenue for cities of all sizes.

The first reading of the ordinance will occur Thursday, when council members are expected to put a figure into the ordinance. Tate wanted to have both readings before publication, to eliminate necessary publication costs. Earlier, council members published an ordinance and changed their mind later, resulting in additional costs.

During the discussion, Heschke thought about the matter since its initial proposal and felt the funds needed to be used to bolster the city’s police patrols.

“I have dwelled on this three or four days and I would like to put this motion out there and if it dies it dies,” he said.

Carlberg sought an exact amount as to how much the city could receive from the tax, but those figures couldn’t be supplied, according to Mayor Danny Joe Tate. She also sought how much the police officers were paid hourly.

“The only way we would know is to put it on for a year and see what we can get off of it,” Tate said. “At least we will be getting some money coming in.”

The increase will not take effect until July 1, so the money would not be forthcoming until late October, city clerk/treasurer Caroline Cline said.

Officials face a tight timeline as the proposal needs to be adopted before the end of the month.

Tate said in the interim he is doing a new budget for the city and has to speculate on how much funds will come in. Tate said retirement costs were predicted to increase about 2 percent this year, as well as increases in gas and insurance.

“We were in pretty good shape until the retirement (increased) and the state took the revenue sharing away from us,” he said. “We just need more revenue to keep up with the rising costs. The next step is that we are not going to have enough people to work on the roads.”

Carlberg again sought the amount of money coming in, to which Tate reiterated he didn’t know.

One council member said the city waited on their other increases, such as a recent increase in the water rates, and had to catch up by increasing them a large amount. It was also noted that health insurance was a big payment for most people, but Tate said the charge would be based on the amount of insurance.

He also said city officials increased the business tax, adding city businesses are paying their fair share.

“The citizens have got to pick up their part now or they’re not going to have a police department,” Tate said. “I hope to generate enough money to have maybe two employees.”

Tate reminded council he had to prepare a new fiscal year budget and either the city needed to take in more funds or the next step would be to cut employees.

“That is the only thing I can cut,” he said. “I can’t cut the water and sewer and turn out all of the street lights. A lot of these people are moving from the rural area into the city and the costs to live in the city are out of control. If you want to live in the city, you are going to have to pay for it. If you want to have all city facilities, you are going to have to pay for it.”

Tate remembered when his water bill was $19 and recently paid a bill for $75.

“It’s all because the costs of trying to operate the city like a business is going up,” he said.

Absent from the meeting was council member Donnie Basham.

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