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County to pay off bit of debt
(The Daily Independent (Ashland, Ky.) Via Acquire Media NewsEdge) Jun. 4--CATLETTSBURG -- Boyd County officials will pay off more than $1.5 million in county debts this month as a result of higher revenues from the net profits tax on businesses.
Judge-Executive William "Bud" Stevens said the county plans to pay off the former FIVCO building, a bond on the Boyd County Detention Center and two sewer projects. Stevens said the debts will be paid by June 27 with funds generated solely from the 1 percent net profits tax.
The county is projecting it will collect more than $2.3 million in net profit taxes and business license fees for the fiscal year ending June 30, up from $370,900 it collected last year. The increase is the direct result of a state appeals court ruling last year that forced Boyd County to amend its previous ordinance.
Boyd County amended its occupational license fee ordinance last March to tax businesses 1 percent of their net profits following a state Court of Appeals ruling, invalidating a section of the county's original ordinance.
The invalid portion -- Section 15 -- allowed businesses to pay a flat rate in lieu of the 1 percent tax on net profits. The court ruled this was unfair because employees, who are subject to a 1 percent tax on their gross earnings, were not offered the same flat-rate option.
The change narrowed the disparity between what employers and employees contribute to the county coffers and swelled the total amount of revenue collected.
According to Boyd County Treasurer Billie Zellers, as of May 31, occupational license fees paid by employees was $3,659,433.13 compared to $1,717,573.38 paid by companies for net profits and business license fees.
That number is expected to reach more than $2.3 million, Zellers said, but numerous large companies have filed extensions on paying their taxes, including Marathon Petroleum Inc.'s Catlettsburg Refinery.
Stevens said the county is making good on a promise it made to business owners to use the taxes to pay down debt.
The court vowed last year to put an additional revenues toward debt service while under pressure from business leaders to reduce the net profits tax to less than 1 percent.County officials argued at that time they couldn't reduce the tax because they had no idea how much it would generate.
He said once the businesses with extensions pay up, the county could put even more toward its debt.
The total June payment will total $1,510,199,97 and will go toward the county's current $18,780,000 of debt.
CARRIE KIRSCHNER can be reached at ckirschner@dailyindependent.com or (606) 326-2653.
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Copyright (c) 2008, The Daily Independent, Ashland, Ky.
Distributed by McClatchy-Tribune Information Services.
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