London City Council members are considering enacting a city occupational tax because of uncertainties about their portion of the tax transferred from the Fiscal Court.

“We have investigated the possibility through Frankfort and although the law flip-flops, we have been assured that it can be done,” said Mayor Troy Rudder.

If the tax becomes a reality, it would supersede the county’s 1 percent occupational tax within city limits. It has been estimated the city generates 58 percent of the tax, which is projected to bring in about $6 million countywide in the upcoming fiscal year.

Through a long-standing agreement between the City Council and Laurel County Fiscal Court, the city receives 25 percent of the collected tax. The city’s portion in the working budget totals about $1.5 million.

“We’ve had a lot of the citizens in town who have voiced their opinion about their tax money staying inside city limits,” Rudder said. “Our main goal now as a city government is to work with the county. In order for an area to be successful, all governments must work together.”

He said city officials have also been asked why city dwellers must pay a more expensive county property tax and whether that money benefits them.

“In the past we have really worked with the county,” Rudder noted. “Years ago, if a road needed blacktopped, the city would buy the blacktop and the county would lay it.”

It’s not that way anymore, he said.

Rudder pointed out the occupational tax issue has not been officially brought before the Council, though he understands there have been some individual conversations about the possibility.

The county’s admitted financial woes will likely play a role in the decision.

“If the (county’s) budget is as tight as they say, if we enact a tax now it would essentially throw the county into default,” Rudder said.

On the other hand, the mayor thinks the city would make excellent use of the money.

“I feel the city would be a very good steward of the taxpayers’ money,” he said. “I think we’ve shown that in the past.”

Rudder said though the city is both directly and indirectly affected by the county’s budget crisis, he’s never been given a firm reason for the crunch.

“They’ve said money is tight, money is short, that there’s going to have to be some cutbacks,” he said. “But as for the reason I don’t know.”

The Council is very interested in maintaining a smooth relationship with the Fiscal Court, Rudder stated.

“The council is considering asking to be put on the (Fiscal Court’s) agenda at the next meeting to open some lines of dialogue to work things out,” he said, noting in the last few years, the city “has been very fortunate to receive (its portion of the occupational tax) in a very timely manner.”

While the Council is still in a wait and see stage, the mayor said whenever the body makes a decision, “it will be 100 percent.”

Council Member Bill Dezarn hasn’t decided whether he would support enacting an occupational tax within the city, but he is interested in further investigating the possibility.

“I’d like to see what we can do,” he said. “I’ll not say yes or no either way. I think its something that needs some consideration.”

Council Member Nancy Vaughn wants to examine the issue further as well.

“We need to see the whole picture as far as the county’s finances are concerned,” she said. “I wouldn’t want to make a commitment at this time, but I would like to see the city and county continue to work together.”

Council Member Danny Phelps feels “the city is going to have to do something because the county is in dire financial straits.”

Before making a decision, though, the city would have to know the legal implications of implementing an occupational tax and whether it “would be a wash — if the city would just be collecting the tax and giving it back to the county.”

“We have to consider this,” Phelps said. “We have to be fiscally responsible, pay the city’s bills and honor our obligations whether anyone else does or not.”

Council Member Judd Weaver is “not in favor of imposing or raising other taxes.”

“However, I am in favor of doing whatever it takes to make sure the city has its proper funding,” he said.

Council Member Jason Handy would “absolutely prefer not to do it.”

“I think it would really put a bad strain on the county, and we both need each other to get things done,” he noted. “We’re better working together than not.”

Council member Barbara Cox couldn’t be reached for comment.

Judge-Executive Lawrence Kuhl and magistrates were disappointed the city is considering enacting the tax.

“It’s been brought up, but I don’t know what they’ll do,” Kuhl said. “They have that right to pass their own (occupational tax). (If they do) it will have a tremendous impact on our county budget.”

He pointed out there has been no discussion about lowering the city’s share of the occupational tax, and, in fact, the allotment has increased each year he has been in office.

Magistrate Roy Crawford, 1st District, hopes the governmental bodies can reach an agreement.

“If we could work it out without people putting in another tax, then we need to do it that way, because we don’t need division between the city and county,” he said.

Magistrate Tom Baker, 2nd District, said the Fiscal Court paved the way for the city to even have the opportunity.

“When the county enacted the payroll tax, the magistrates and the county judge had to take the heat for it,” Baker said. “It was out of the good graces of their heart that they gave (the city a portion).”

He pointed out the county regularly contributes to city projects, including Main Street renovations, and continues to give the city its 25 percent of the occupational tax.

“I would be disappointed with the City Council and the mayor (if they enacted their own occupational tax),” he said. “But if they so desire to do it, I can’t stop them.”

Magistrate Jeff Book, 4th District, hopes the city thinks the possibility through carefully.

“It’s their decision,” he said. “If they’ve weighed it all out, and they feel that’s for the best then that’s totally up to them.”

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