First round of payroll tax negotiations between Corbin, Whitley set this week

A first-round of negotiations between Corbin officials and Whitley County officials over a possible occupational tax revenue-sharing agreement is tentatively slated for Friday.
Whitley County Judge-Executive Mike Patrick said Tuesday that he thinks the county and its two cities will be able to work out an agreement, but declined to speculate on what the percentages would be. Williamsburg passed the first reading of an ordinance Monday to enact an occupational tax of its own.
Patrick said he spoke Monday with Williamsburg Mayor Roddy Harrison, Corbin Mayor Amos Miller and attorney Jeff Mando about the meeting.
The move comes just days after Corbin City Commissioners voted unanimously, for a second time, to approved a citywide occupational license tax. Confusion exists regarding who should get the money and how the tax will be applied.
Mando, an attorney specializing in constitutional law hired by the city of Corbin, claims citizens in both the Knox and Whitley County portions of the city will be able to credit any taxes they pay against similar county taxes. Corbin is the only city in the state of Kentucky that lies in two counties.
“This tax is not an add on,” Mando told a crowd who watched the proceedings. A few spoke to the commissioners.
Mando added that if negotiations with both counties “don’t prove fruitful” then he would file lawsuits in both counties seeking a judgment on the issue.
“It is all our best interests to move forward from here,” Patrick said. “It may sound silly, but it’s a fuss amongst siblings, but we are still family. We have to work together … we will be having a meeting before week’s end with all parties concerned to sit down and see if we can negotiate a compromise on this matter.”
Knox County Judge-Executive Raymond Smith told commissioners he sees passing the tax as negative and unnecessary.
“I’m not here to challenge anyone’s right to do what they see is necessary, but I think the actions taken here can only be seen as an opportunity to jeopardize the economic growth in this area.”
Smith maintains Corbin taxpayers cannot count the new tax as a credit against the county tax, causing the city tax to stack. He pointed to the county’s fight with the city of Barbourville over the issue as the governing law.
“We spent a great deal of taxpayer money to resolve that issue,” Smith said. “The way the laws are written today … you cannot take credit against the occupational tax paid in Knox County.”
Smith also noted that state law says only a city “contained within” a county with an occupational tax can claim the credit. Corbin is not contained within Knox or Whitley County because it stretches across both. Mando said legislators didn’t likely mean to exclude Corbin taxpayers from claiming a credit since it is the only county in the state the law would affect in that way.
Patrick contends Whitley County’s occupational tax ordinance makes provisions to split revenues with Williamsburg and Corbin. He calls the money “city development,” but said there has been disagreement over how much should be given.
“I understand they disagree with the percentages that were used, and possibly the amounts,” Patrick said. “The distribution in that budget was based strictly on population. We were not able to get anything definitive on what might come from where. We could get pretty decent countywide numbers, but not within the city numbers, so we chose population.”
Others attended the meeting to voice their displeasure over the city’s tax move.
Jim Matney, Director of Operations at TECO Coal Headquarters in Corbin, said he views the vote as “economic warfare” against his company’s employees.
“We will assess all alternatives that we have available to us,” Matney said.
Those options included the company moving its operations, withdrawing sponsorships from civic groups and charitable organizations, and organizing a boycott against businesses in the city of Corbin.
Local businessman Skip Walden said the city leaders were passing a tax for only things they “want” but not for any real need. He said county officials would likely counter with raised property tax rates and an insurance tax if proceeds of the currently occupational tax are reduced.
Corbin Mayor Amos Miller said the city laid off employees and trimmed over $250,000 from its budget before passing the tax.
Responding to criticism that they should have worked out a deal before passing a tax, Commissioner Alan Onkst said city leaders tried to come to some sort of arrangement with Knox County, but the deal fell through. In a news release, Commissioners say they met with Knox County officials on Jan 5, Feb 12 and March 32 in 2004 to work out a settlement.
“All that Knox County has offered to date is verbiage and no action,” the statement. “At anytime Knox County and Whitley County want sit down and negotiate a fair allocation of revenue, the city of Corbin is willing.”
Onkst supported the statement.
“Mayor Miller and I attended the meeting of the Knox County Fiscal Court when the tax was enacted and we were asked to leave … we were almost escorted out of the building,” Onkst said.
Commissioner Phil Gregory pointed to a deal city leaders say they struck with Knox County last year for a $50,000 a year payment to the city … a deal Smith denied any knowledge of when Commissioners asked for the money at a Knox County Fiscal Court meeting.
“We are not mean people by no means. We don’t want to do this,” Gregory said. “We are a good neighbor. This is the only thing we’ve done is to say we want our fair share, that’s all.”
Miller said that, as of press time Tuesday, Knox County officials had not responded to requests to negotiate a settlement.