Whitley could face two cities who won’t share

Whether Whitley County will be able to fully operate its government in the coming months is a question that county leaders may be faced with after the Corbin City Commission voted Monday evening to implement its own payroll tax.
Assuming that Corbin approves the second reading of the ordinance and keeps 100 percent of the occupational tax revenue coming from that city, Whitley County will be looking at a projected $599,646 shortfall in its budget for the current fiscal year, which started July 1.
If the Williamsburg City Council follows suit, and implements its own payroll tax keeping 100 percent of the proceeds from that town, then the fiscal court could be staring at another $531,762 shortfall.
This would bring the grand total to $1,131,408 that the county currently has budgeted, but won’t be able to spend if both municipalities approve their own payroll tax. It also represents 9 percent of the total budget, which is $12,575,942.
In late June, the Whitley County Fiscal Court implemented a countywide 1 percent occupational tax in an effort to pay off a nearly $1.2 million deficit racked up during the 2004-2005 fiscal year, which ended June 30. The county was forced to do this in lieu of laying off half the county workforce, and eliminating employee health insurance.
Based on the county’s own budget estimate, the payroll tax is expected to generate about $2,977,388 in the first fiscal year. Of that tax revenue about $1,199,292 is projected to come out of Corbin, while Williamsburg is expected to generate roughly $1,063,524.

Williamsburg still waiting
Williamsburg Mayor Roddy Harrison said he plans to make a “last ditch effort” to get Corbin, Whitley County, and Williamsburg to the negotiating table before Corbin passes the second reading of their tax in an effort to see if the three entities can work out an agreement to divide up the tax, but he acknowledges the chances of this happening are not good.
Harrison said he wasn’t surprised that Corbin passed the first reading of their occupational tax ordinance Monday.
“I had heard, like everybody else, that was the plan,” Harrison said. “I would have liked it a lot better if we had all gotten together, and decided what was best for all three places. Now, it has kind of changed the ballgame on us a little bit.”
Harrison is remaining tight-lipped about what the city plans to do in regards to the tax. He does say that he wants to get more concrete figures on exactly how much revenue the tax will be producing before making a final decision.
“We are going to do what’s best for the town people of Williamsburg. We can’t sit back, and just let things go, and not help our townspeople, but we need to take a good hard look at it,” Harrison noted.
“We also understand that there should be a county government in our area. We are the county seat. We have the ambulances here. The jail will be here again. There are some things we need to take a good hard line look at. I can assure everyone out there that we will do what’s best for Williamsburg because that is our job.”
Does this mean what’s best for Williamsburg is the city implementing its own payroll tax, and keeping 100 percent of the revenue? Harrison refuses to say for certain, but admits it’s a “definite” option.
“To get me down to a certain percent, I am not going to go there right now,” Harrison said acknowledging that he wants more than the 50 percent the fiscal court had budgeted for the two cities.
“I’ll put it this way. We can’t sit back and allow one city to get ‘X’ amount of dollars, and then us just kind of sit over here, and not worry about it. That’s not going to happen, but in the back of my mind, I just keep knowing that we do need a county government.”
Williamsburg City Councilman Richard Foley said he wants to see how things turnout with negotiations between Corbin and Whitley County before making any comments on what portion of the tax Williamsburg wants.

Initial plans
County leaders had planned in their budget to give city leaders half of the tax revenue that was generated in those cities, and to keep half of it for themselves.
However, because the county didn’t reach an agreement with the cities on the splitting of tax revenue from municipalities before the tax went into effect, both Corbin and Williamsburg can implement their own occupational tax, and keep 100 percent of the revenue coming out of the cities.
Officials for the Governor’s Office of Local Development cautioned the county during its budget and payroll tax hearings this spring that without an agreement, the cities could implement their own tax, but Whitley County Judge-Executive Mike Patrick contended there was nothing to negotiate until after the tax was approved.
Had the cities agreed to the county’s plan, the fiscal court would have had roughly $1,697,110 in projected payroll revenue to spend this fiscal year.
If both Corbin and Williamsburg keep 100 percent of their tax revenue, then Whitley County will be left with about $565,702 out of the occupational tax revenue. This is minus $122,300 to administer the tax this fiscal year, in addition to a $26,570 reserve that is budgeted.
If Williamsburg keeps 75 percent of their tax revenue, and lets the fiscal court have 25 percent of the revenue, then the county would have roughly $831,583 in payroll tax revenue after expenses.
What impact the closing of the jail will have on the county’s budget is uncertain.
State officials warned this spring that if the jail closed, the county wouldn’t be able to balance its own budget even with the implementation of a payroll tax.
The jail closed in late July, but Whitley County leaders are currently working with Knox County officials in an effort to re-open the facility as a regional detention center.
Patrick said Monday afternoon that he was scheduled to meet with Knox County officials Tuesday morning concerning the jail, however, Patrick could not be reached for comment Tuesday afternoon for comments on the jail meeting, or Corbin’s passage of the payroll tax.