Clark Fiscal Court members discuss state roadblocks to revenue sources

State laws are standing in the way of changes that could bring the county additional revenue from three different sources.
During a Clark County Fiscal Court budget meeting Wednesday, commissioners addressed the county’s grim financial situation and discussed how to improve it.
Three ideas — increasing the county’s payroll tax, raising the 911 surcharge for cell phone users to $3 and implementing a restaurant tax — can’t be done because of several details included in Kentucky statutes, commissioners said.
Counties with a population of more than 30,000 are capped at a 1 percent payroll tax, and Judge-Executive Henry Branham said Clark County is at 1.5 percent and it is grandfathered in.
“So in grandfathering in, we can never change our payroll tax ordinance structure,” Branham said.
Another issue, Branham added, is that the county taxes businesses with five employees or more, and if the county wanted to change it to tax businesses with one employee or more like the city, it could not because of its population. While it would not be a tax increase, it would provide a wider field from which to collect revenue.
Commissioner Rick Smith expressed particular concern that the population cap was preventing the county from receiving additional revenue.
“So that’s the reason we would like to see ... that 30,000 cap go away. We think it’s an arbitrary number and there’s no basis for it,” Branham said.
Another area of revenue would be boosting the 911 cell phone surcharge for the Winchester-Clark County dispatch center from 70 cents to $3 a month, equaling the landline surcharge.
But while the county sets the landline charge, the state is in charge of setting cell phone surcharges.
Clark County landline providers send surcharge fees directly to the dispatch center, and the state sends cell phone surcharge fees directly to the city. Branham said last year, the county generated about $369,000 in landline surcharges for the dispatch center, and Fiscal Court gave about $85,000 to the center from its general fund.
Branham said if the state changed the cell phone surcharge, it would indirectly affect the Fiscal Court because the court would not have to give as much general fund money to the dispatch center. He also said that it would make more sense.
“There are people that don’t have landlines and all they have is cell phones,” Branham said. “So why shouldn’t a cell phone pay the same as a landline?”
Currently, the statute does not allow counties to implement a restaurant tax outside the city limits. Winchester is also not allowed to implement restaurant taxes because it is classified as a class 3 city, but class 4 cities with lower populations can do so.
Commissioners brought up the city issue as well, and argued that both the county and city restrictions inhibit possible revenue. Commissioner Vanessa Rogers expressed frustration that the state does not take a quicker, closer look at these stipulations.
The court also discussed the idea to require businesses in the county to purchase business licenses to operate, which the county itself without state changes. Branham suggested license costs of $20 to $25 a year, but said there would have to be guidelines detailing which businesses would be required to comply.
For example, Branham said, if someone was operating a business along and brought in $200 a year from the business, $25 a year would be an eighth of his profits. So, he said, Clark County Attorney Brian Thomas and the court would have to work together to come up with guidelines for that if it were considered.
Community Education Director Cora Heffner was the lone citizen to attend the budget meeting, and she advocated for more community education of the financial issues along with urging citizens to help commissioners rally state attention to the issues.
Commissioner JoEllen Reed suggested creating a citizen budget committee to help come up with budgetary suggestions for the court and creating a team to talk to different employees of county bodies and gather input.
“I think any time that legislators hear from their constituents, then they’re kind of responsive to that. Especially if it’s in mass, if it’s a lot,” Branham said of gaining community support. “A¿lot of times, if it’s one or two, maybe not, but if a lot of the citizens of Clark County said, ‘Hey we’re concerned that cell phone surcharges are not as much as landline surcharges,’ then I think that there might be response from the legislators that represent Clark County.”
The next Fiscal Court regular meeting is scheduled for 9:30 a.m. Wednesday, Sept. 14, and a budget meeting is tentatively scheduled to follow.

Contact Katie Perkowski at kperkowski@winchestersun.com or follow her on Twitter, @TheSunKatie.