Four council members comprise a new committee that will take another stab at the city’s plan to deal with state-mandated pension contributions that local officials estimate will cost $66 million over the next 10 years.
At Tuesday’s Hopkinsville City Council meeting, Mayor Wendell Lynch issued an executive order establishing the Future Funding Review Committee. Ward 12 Councilman Phillip Brooks will chair the committee. The other members are Don Ahart, of Ward 3, Paul Henson, of Ward 4, and Amy Craig, of Ward 5.
“Basically what I did was slow it down — for two reasons,” Lynch said after the council meeting. “We got feedback from the public that they wanted more time to absorb this and give comments. And we welcome them to come to these next few meetings to have comments and input from their perspective.
In addition, the city is still looking to state lawmakers to provide legislation that would give cities like Hopkinsville more options to levy taxes on restaurant receipts and alcohol. The General Assembly is currently in session.
“If those things were to make it through, they would give us some broader options as far as revenue for the next budget year or two,” Lynch said.
Prior to his appointment as interim mayor last month, Lynch chaired another committee of council members and community members who recommended tax increases and budget cuts.
One recommendation was to increase the city’s business license tax from 1.5% to 1.95% on net profits and to eliminate the $10,000 cap that’s currently in place. City officials estimated it would generate an additional $1.24 million annually.
That measure passed by an 8-4 council vote on Feb. 19. But opposition to the tax increase forced the council to delay plans for second reading and adoption on Feb. 21.
Lynch’s executive order for the new committee outlines six options the members should consider. Those are:
- Payroll Tax Projection —Test the current assumptions on payroll tax growth (1%) against other more aggressive assumptions. Factor in historical trends and averages balanced with current realities and foreseen economic opportunities.
- Health Trust Fund —Re-evaluate the current trends in our Health Trust Fund and affirm that current guidance of 15% cost escalation is realistic and on target. Are there other cost containment measures that should be implemented?
- Business License Tax Rate —Review Pension/Future Funding Committee’s recommendation.
- Annual Cap —Determine the appropriate adjustment to the current cap to meet the City’s budgetary needs over the next one to two budget cycles. Give consideration to a phase in approach and an annual percentage adjustment that would capture inflation and minimize the necessity to revisit the cap in the near future.
- Budget Cut —Review the recommended across the board budget cuts and re-affirm or suggest modification.
- Other —Suggest other revenue options and meaningful cost savings options as may be uncovered in your review.
The committee will bring its recommendation to the council no later than the June 18 Committee of the Whole meeting, the mayor said.
Jennifer P. Brown is co-founder, publisher and editor of Hoptown Chronicle. You can reach her at editor@hoptownchronicle.org. Brown was a reporter and editor at the Kentucky New Era, where she worked for 30 years. She is a co-chair of the national advisory board to the Institute for Rural Journalism and Community Issues, governing board past president for the Kentucky Historical Society, and co-founder of the Kentucky Open Government Coalition. She serves on the Hopkinsville History Foundation's board.
