Wednesday, January 3, 2018

As city accumulates cash from payrolls, mayor says he wants a cut in property taxes, not the occupational tax

By Lizzy Allen
University of Kentucky School of Journalism and Media

Midway piled up more than $950,000 in its general fund at the end of the 2016-17 fiscal year, according to an audit report released at the council meeting on Tuesday.

Mayor Grayson Vandegrift said after the meeting that he hopes to use this extra money, which comes mainly from payroll-tax revenue, to cut property taxes – and to make capital improvements to the city’s water and sewer systems, if he is assured of the legal authority to do that.

“I don’t know exactly what the rates will be, but . . . I’m planning on making significant cuts to property taxes,” Vandegrift said. In recent years the city has made small reductions in property-tax rates, but largely to compensate for higher property assessments

Jason Strange, certified public accountant for Stiles, Carter & Associates, an Elizabethtown-based firm that did the audit, noted that the payroll-tax revenue from workers in Midway was considerably higher than anticipated, bringing in over $100,000 more than the budgeted $400,000.

Based on the 2016-2017 collections, $500,000 is budgeted for payroll-tax revenue in the current fiscal year that ends June 30. Although this is a 25 percent increase from last year’s budget, Vandegrift said he is “confident we are going to exceed that.” He noted that the new Lakeshore Learning Materials distribution center has 130 employees, none of whom were on the payroll in the 2016-17 fiscal year.
The Lakeshore Learning Materials plant is shown on Oct. 24, just over a week before it began making shipments.
Though the payroll tax provides an increasing share of the city’s revenue, Vandegrift said he would rather lower property tax rates for citizens of Midway than lower the payroll tax, since most who pay it don’t live in Midway do not.

Although Strange said that the audit report was “clean,” he did point out that the Midway Fire Department made two purchases without first completing the corresponding purchase orders. These purchases totaled over $500, Strange said in an interview.

When Council Member Kaye Nita Gallagher asked about the issue, Vandegrift said kt “should have never happened,” but the purchases had been approved, just without purchase orders.

The audit report is a draft, but Strange said he does not expect any changes.

At the meeting, the council also approved a permit for the Iron Horse Marathon, which will be held Sunday, Oct. 14.

The meeting was held on Tuesday instead of Monday, New Year's Day. The next meeting will be held on Tuesday, Jan. 16, because Monday of that week is Martin Luther King Jr. Day.

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