The Olive Hill city council on Tuesday pulled back from implementing a planned payroll tax and instead opted to study other ways to raise money.
More than an hour into a contentious sesssion during which more than a dozen of roughly 50 tax opponents blasted the council for considering the tax, council member Glenn Meade withdrew the motion he had made in late August to set a 1.5 percent tax.
Meade's action was met with vigorous applause, but moments later Mayor Kenny Fankell warned the action would have almost immediate consequences. “In three weeks, if something is not done, services are going to be cut,” he said.
Services most likely to be cut are police and fire, which are the departments that have reported the most difficulty in keeping up with equipment, maintenance and staffing expenses.
The council set a work session meeting for 6 p.m. Sept. 26 at the senior center where it typically meets. Tuesday's meeting was held in the Olive Hill Elementary School gymnasium to accommodate what was expected to be an overflow crowd.
In the work session the council will meet with some of the most vocal opponents who attended the Tuesday meeting and their goal will be to find funding mechanisms that meet the city's needs and spread the burden more equitably among city residents and those who work there.
That promises to be a difficult job because Olive Hill's finances already are in precarious shape and state law limits the ways Kentucky cities can raise revenue.
There was little to no sentiment in favor of the tax among those who lined the bleachers opposite the council table.
“First of all I want to say, shame on you,” said Lorna Binion, who reminded the council that the city's residents already had been devastated by floods and that workers in the city shouldn't be singled out to mend finances. “I'm ashamed of you,” she said.
Suggestions from opponents ranged from selling off some of the city's vehicles to assessing one-time fees to city residents. Other suggestions included increasing water rates and property tax rates and implementing sales taxes.
However, most of those remedies wouldn't bring in enough money or don't pass legal muster. Cities can only hike property taxes up to 4 percent per year without a vote; water revenue can't be used to pay general city obligations, and the Kentucky constitution doesn't allow cities to levy sales taxes.
Opponents said the tax was unfair and a harsh burden on workers who already are having difficulties making ends meet. “We agree extra revenue does need to be generated but not if it causes hardship,” said Pam Duncan, a first-grade teacher at Olive Hill Elementary. Duncan, who was flanked by four other teachers, said most of the faculty don't live in city limits anyway and that teachers in particular are stretching their paychecks because they have only received one slight pay increase in the past five years.
The council fought for more than an hour to persuade listeners and warned that fire and police protection would suffer. Both departments are already having severe difficulties. The police department has gone from 12 officers in 1992 to four now. The fire department is contending with multiple broken hydrants and trucks need repairs.
Fankel said police layoffs might be in store. “I don't know if it will be one, two or three,” he said.
Fire runs outside the city limits are likely to be eliminated. Other departments have their own problems, including aging water lines that may rupture and interrupt water service.