City may lower some business license fees

Corbin leaders say they plan to study whether some of the city’s business license fees are too high, following a robust and, at times, testy discussion during the regular monthly meeting of the Board of Commissioners Monday.

City Manager Bill Ed Cannon asked that commissioners take a look at the city’s annual business license fees over dual concerns – that some businesses are paying exorbitant rates, and that economic conditions, coupled with the fees, may force some companies to consider layoffs or worse.

"As well all know, the business climate right now is probably as bad as I’ve ever seen it. I don’t remember it being worse," Cannon said.

He proposed putting a conditional cap of $1,500 on all business licenses for next year, and freezing the cost of others. Most businesses in the city pay a flat rate for what is typically known as a "privilege license." The rates are different depending on the type of business. Four types of businesses, though – restaurants, grocery stores, wholesalers and retailers – pay their fees based on gross sales.

It’s that last group that commissioners are likely concerned about. Some companies pay $10,000 or more annually for the right to operate a business in Corbin.

"One company paid tremendously two weeks ago," Commissioner Phil Gregory said, in support of lowering some of the fees. "The same company’s [employees] are taking buyouts. It’s not going to be long before they are laying off … All this is, is to keep it here and make it easier on these people. We’ve not seen the hard stuff yet."

Gregory did not say which company he was referring to, but officials said earlier during the discussion that Whayne Supply Company had paid a hefty sum in business license fees and property taxes this year.

Gregory noted the city collected $388,000 in business license fees this past year. Cannon estimated with a $1,500 cap, that amount would likely go down $110,000 to $120,000 annually.

Commissioner Bruce Farris, a local Certified Public Accountant, and one of the principal architects of the current business license fee structure, said he is open to the idea of lowering or capping some fees, but said he has a hard time removing over $100,000 from the city’s revenue stream without making up for it elsewhere through other taxes or spending cuts.

"I wish everybody could pay less tax and everybody would be happy," Farris said. "This is something we would have to be justified in doing and not just do it on the allusion that if we cut this tax over here $20,000 they won’t close down or they won’t lay anybody else off. I really doubt that would enter into the equation when they make those decisions."

Commissioner Dennis Lynch sternly chastised Cannon for even bringing the issue up before it was "cleared" with commissioners or properly hashed out in private. He said city leaders have been working on the issue for some time, but have yet to come to a conclusion everyone could agree on.

"I’m very surprised that with all the time this mayor and this commission have gone over this very item for weeks trying to get something we can all agree on that we would even have this brought before [us]," Lynch said. "I see now that the paper is getting down now that we are going to do something on our license fees and I wonder what kind of shape that leaves us in if we decide not to do a thing."

Cannon said he cleared bringing up the issue with a couple of members of the commissioner earlier in the day.

Mayor Willard McBurney noted that the change in fee structure back in 2002 was undertaken as a temporary measure to help shore up a beleaguered city budget. He said he is in favor of reviewing the license fees and reducing them if possible.
During his campaign for Mayor in 2006, McBurney promised a review of the fees.