The Ashland Board of City Commissioners gave final approval Wednesday to raising payroll and alcohol taxes in the coming months.
The tax hikes are needed to balance the city’s $46.5 million annual budget, officials said. Ashland’s proposed 2013-14 budget, which will begin on July 1, was also enacted Wednesday.
City Manager Steve Corbitt said last week the city slashed capital projects and operating expenses to close a $7 million shortfall.
Workers inside the city limits will see their occupational license fee, commonly called a payroll tax, go from 1.5 percent to 2 percent beginning Aug. 1. With the increase, Ashland expects to garner $9.79 million in revenues during the fiscal year, up from a projected $7.8 million for the year ending June 30, according to the budget.
The regulatory licensing fee on gross receipts of alcoholic beverages will go into effect July 1. It will jump from 3.5 percent to 4 percent and is expected to bring in $682,285 in revenue. During the 2011-12 fiscal year, the tax brought in $544,702. Revenues for the year ending June 30 is expected to be close to that figure, according to city projections.
Property tax rates in 2014 will be slashed 20 percent next June. The expected drop in revenue will be approximately $878,000.
In 2012, property tax revenues were $2.8 million; revenues are projected to be $3.3 million in 2013. With modified rates in 2014, the tax would bring in $2.5 million.
A net increase of $1.8 million in revenue is projected in the coming fiscal year, according to Tony Grubb, Ashland’s finance director. The decrease in property tax revenue will be offset by new revenue from the payroll and alcohol tax rates as well as growth projected in other revenue sources, including net profit and business licences and other franchise fees and taxes.
Commissioners met Wednesday in a continued session from their June 4 regular meeting. Officials also enacted ordinances for a change order at the Sixth Street pump station project, a grant application and bank deposit franchise taxes at the meeting before going into a closed session for an individual personnel matter.
CARRIE STAMBAUGH can be reached at email@example.com or (606) 326-2653.