Tax could cost taxing districts thousands

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County has four taxing districts that could be charged for tax rolls, costs could go on to residents

By Calen McKinney



If passed, residents could face higher taxes.

But now, after many Kentucky residents and representatives from taxing districts complained, it looks as if it won't happen after all, though the decision is not final.

In Kentucky Gov. Steve Beshear's two-year budget proposal, he at first included a provision that would help PVA offices generate money, by charging special taxing districts to use their county's tax rolls.

Tax rolls are used to calculate tax rates and determine how much revenue can be generated, by using property values and the overall amount of property in a community. According to State Sen. Sara Beth Gregory, R-Monticello, special taxing districts currently use the county tax rolls for free.

There are four special taxing districts in Taylor County that have levied taxes residents pay, including Taylor County Extension District, Taylor County Health Department, Taylor County Hospital District and Taylor County Public Library.

Gregory said Beshear's proposed fee, capped at 8 percent of property tax revenue, would be used to help fund PVA offices across Kentucky.

"The governor's plan reduced PVAs general fund budget by $15 million in each year," she said. "The House budget proposal reversed this decision and gives the PVAs some additional general fund dollars. We have not yet seen the specifics to determine the source of this funding used by the House."

PVAs are funded by city and county governments, which pay for the use of the county tax roll, and state funding.

"There is no doubt the governor's proposal would be damaging to libraries, health departments, and others who would be among the affected taxing districts," Gregory said. "At the same time, many PVAs are in a position that they cannot maintain current staffing and service levels without additional funding."

A House budget committee passed a nearly $20.3 billion two-year state budget and revenue bills on Tuesday that trim funding for most of state government, according to the Legislative Research Commission. An LRC news release states that the House committee's budget gives nearly $32 million in the state's general fund to restore PVA offices to base level funding, "without reliance on new fees."

The four budget bills will now head to the full House for consideration.

Taylor County PVA Chad Shively said PVA offices statewide are underfunded and now have more burden to help address the state's funding shortfall.

But if he has to start charging special taxing districts, Shively said, the public should know that decision wasn't his to make. But he said he believes districts don't have anything to fear.

"I personally don't think it's gonna go anywhere," he said.

Nevertheless, those at the taxing districts in Taylor that would have to start paying say the impact of that, should it come to fruition, might simply be passed to local taxpayers.

Taylor County Public Library Director Julia Turpin discussed the issue with board members during a meeting on Monday. She said she went to Frankfort last Thursday for Library Legislative Day and met with Gregory and State Rep. John "Bam" Carney, R-Campbellsville, to discuss the issue.

"It was really a tax on a tax," she said.

If forced to pay for using the tax roll, Turpin said, the library could have had to pay as much as $75,000 for the service. The library tax typically generates about $800,000 a year.

"For some perspective, our current year's budget for books, bookmobile service, and all programs for kids and adults is just under $70,000," she said. "As we've seen such circulation and programming increases, I had hoped to expand our book collection and services next year, but this fee would not allow for that and we would certainly have to make cuts. I think the board would have to consider a tax increase to accommodate these new fees."

And while Turpin said the measure isn't in Beshear's proposed budget now, that doesn't mean it's final.

"But things are looking up for us," she said.

Pat Hardesty, Taylor County Extension agent for Agriculture and Natural Resources, said the county's tax roll is used to determine the compensating tax rate, which is the rate extension district board members typically set.

The extension tax typically generates about $500,000 a year. If the district had to pay an 8-percent fee to use the tax roll, $40,000 would have to be set aside for that payment in the extension district's budget.

Hardesty said he believes board members wouldn't consider raising taxes to offset that additional cost, though renegotiating the budget would be necessary.

"We would just have to readjust our budget," he said. "It would be an additional expense of doing business."

Taylor Regional Hospital CEO Jane Wheatley said the hospital's tax generates about $1 million a year. If forced to pay an 8-percent fee for using the tax roll, she said, that equates to $80,000.

The impact of the new fee, Wheatley said, would mean the hospital likely wouldn't pay to have the tax roll on hand so staff members can readily find patients' tax payment information and deduct it from their bills.

"So it's really hurting the people," she said.

In order to receive credit on their bills for paying property taxes, as the hospital has done for many years, Wheatley said it would be up to the patient to bring proof that they paid their taxes.

"It would just [put more] burden on the people to have to do that," she said.

A phone call to the health department for comment on how the new fees might impact that taxing district hadn't been returned at press time.

To discuss the proposed fees with Taylor County's legislators, contact Carney at (270) 465-5400 or john.carney@lrc.ky.gov. To contact Gregory, call (800) 372-7181 or email sara.gregory@lrc.ky.gov.