Published: March 14, 2009 12:07 pm      

Raceland promises to work on payroll tax

Hopes to come up with affordable amountBy MIKE JAMES

RACELAND — A loose committee of council members and employers in Raceland hopes to meet next week to hash out a payroll tax compromise.

Among the employers will be Raceland-Worthington Independent School District Superintendent Frank Melvin, Super Quik owner Lynn Rice and Joy Conley, who owns the Small Wonders Learning Center day care.

Also attending will be Woody Lane, district chairman of Local 6344 of the Brotherhood of Railway Carmen, which represents hourly workers at CSX and Progress Rail facilities in the city.

Their main purpose is to come up with a payroll tax amount that workers can afford and at the same time is enough to keep the city financially solvent.

The arrangement for the meeting, which hasn’t been scheduled yet, came during a special council meeting Friday. The community center meeting room was standing room only, similar to the Tuesday meeting at which the council delayed collection of the already enacted 2 percent tax until May.

Conley, who as Russell city clerk has 20 years of experience in municipal finances, offered to assist Raceland in analyzing its financial standing and needs.

How much the 2 percent tax would bring in remains unclear, because the city hasn’t been able to get firm payroll information.

What is clear is that none of the worker groups wants to pay that much. Melvin and Lane each suggested a quarter of a percent would be better.

Whether the council will agree remains to be seen. Council member Charles Powell said he would have to try to calculate how much money it would generate.

The worker groups consistently say they’re willing to help the city dig out of its financial hole. In a good-faith gesture, Lane and CSX employees offered to repair a damaged backhoe for free.

Melvin thinks the council should seek guidance from the Kentucky League of Cities to come up with solutions.

Cities the size of Raceland are limited by state law in how they can raise money. Income taxes, for instance, aren’t allowed. And Raceland is further limited in its ability to control expenses, because most city workers are union members and their contract gives the city few options.

“I think they’re going to work with us,” Lane said afterward. The workers he represents won’t be satisfied if the tax is more than a quarter of a percent, but they’re willing to negotiate, he said.

Melvin and Conley both said they were encouraged by the tone of the meeting. “I think they’re going to do the right thing,” Conley said.

The meeting was productive because it got the city and the worker groups working together, Powell said. “Now we know what their feelings are. We know that they are willing to work with us and we are willing to work with them.”

No matter what the eventual amount, the ordinance will be amended to remove language that appeared to levy the tax on corporate revenues. That was a mistake, Powell said. “It was never intended to be more than a payroll tax.”

MIKE JAMES can be reached at mjames@dailyindependent.com or at (606) 326-2652.