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County officials took the first steps in lowering occupational and net profit taxes Monday morning. The change would take effect January 1, 2011.
The current rate collected by the fiscal court is one percent of occupational and net profits earned in Spencer County. Magistrates approved the first reading of a budget that would lower those rates to 0.8 percent.
For anyone employed in the county, the reduction would mean paying $80 for every $10,000 earned – instead of the $100 they are currently paying.
Judge Executive David Jenkins said that the change would result in $95,000 less in revenue.
“We said we would evaluate (the tax rate) every budget cycle,” said Jenkins.
The occupational tax ordinance passed in June 2007 and was implemented October 1 that same year. Jenkins said that since the tax is paid by employers and businesses every quarter, the county did not begin receiving revenue until February 2008. Only now, said Jenkins, has fiscal court been able to get an idea of how much the tax generates during the year.
“We actually took in more money that we anticipated,” said Jenkins.
The 2010-11 proposed budget estimated the county would collect $315,000 in occupational taxes and $40,000 in business net profit taxes.
Through the end of March 2010, the county has collected $332,500 in occupational taxes and $55,000 in business net profits since July 1, 2009.
Insurance premium taxes – which saw no change in collection rates – are expected to bring in $500,000.
The county estimates that real property taxes collected in the next fiscal year will remain flat at $760,000 and generate the same amount of revenue as the 2009-10 fiscal year. The total county budget of revenue and expenditures is $4.7 million.
Other changes to the 2010-11 fiscal year budget included:
• No raises for county employees.
• An appropriation of $37,500 for employee benefit cards. The proposed budget could raise the amount employees could use on co-pays, prescriptions, dental and vision expenses. Fiscal court would have to approve raising individual cards from $500 to $750.
• Paying the judge executive’s and the deputy judge’s salaries entirely out of the general fund. In the past, these two positions received part of their salary from the county road fund.
• A $4,700 increase in the sheriff’s department uniform allowance.
• Changing the occupational tax enforcement position from part-time to full-time.
• A $43,750 reduction in 911 dispatching service costs.
• A $2,500 increase in park utilities.