DR approves payroll tax hike

-A A +A
By Bryan Marshall

With reserves threatening to dwindle to dust, Dry Ridge Mayor Clay Crupper said there was “no option” but to seek more revenue for the city.

That additional revenue looks to be coming from an increase in the city’s occupational tax from .5 percent to 1.5 percent on anyone who works in the city limits.

The city council approved a first reading of the increase during its June 3 meeting as council members Jim Hendy, Sara Cummins, Fred Money, Carisa Hughett and Scott Bates voted in favor of the increase while Kenny Edmondson abstained from voting, meaning he voted with the majority.

The second reading will take place at 5:30 p.m. June 17.
“Naturally, you’ll have some people who will be upset and they’ll be some opposition,” Crupper said. “There always is when you talk about a little tax on something. But, I don’t want to raise property taxes or anything like that. The payroll tax is about the only thing we could do.”

Employers are required to report their employees’ earnings quarterly to the city.

One of the largest employers in the city is Grant County Schools with employees at Dry Ridge and Sherman elementary schools, Grant County Middle School and Grant County High School.

For a first-year instructional assistant who makes $10,516 a year, the tax rate increase would raise the amount paid to the city from $52.58 to $157.74, according to Nancy Howe, public information officer for Grant County Schools.

For a first-year teacher making $34,932 per year, the tax would cost $523.98 compared to $174.66 at the .5 percent rate.
A 26-year veteran Rank I teacher making $60,565 would pay $908.48 with the new rate instead of $302.83.
In a letter to city council members dated May 31, Crupper explained that the General Fund year-ending balances continue to decline and will do so with increased costs.
“I do not know of anyway to continue the same level of services without finding a way to increase the General Fund revenue,” Crupper wrote. “The city has trimmed budgets as much as possible without decreasing fire, police and maintenance services.”

In the recently passed 2013-14 city budget, Dry Ridge is estimated to only have $32,912 in its General Fund at the end of the fiscal year.
Crupper said he only saw two choices: increase revenue or decrease or eliminate services.

“If you choose to increase revenue, I see only two choices- insurance premium taxes or occupational license taxes,” Crupper wrote. “I am asking you to consider our choices and act accordingly what you believe to be the best choice for all our residents, taxpayers and employees working within the city of Dry Ridge.”

The city first passed an occupational or payroll tax in March 2000 at a rate of .5 percent.

At the time, the city council initially discussed and ultimately voted down a 1 percent occupational tax rate after objections from employers within the city limits.
However, the council then came back and approved a smaller .5 percent tax rate.

“It takes money to run a city and we are hoping the .5 percent will hold us for a long time,” said then-Dry Ridge Mayor Bill Cull, after the occupational tax was approved in 2000.

Dry Ridge Assistant Fire Chief Calvin Crupper, who was on city council when the occupational tax first passed, told current members the rate should have been high in the first place.

“I was sitting where you guys are when we did it originally and 1 percent is what we should of went with then,” he said. “We went .5 percent. Six months later, we knew it wasn’t enough. People was done griping after a month and then they forgot all about it. We did what we said we would do. We promised them an ambulance service and the city has done that.”
Dry Ridge is the only city in Grant County to have an occupational tax.
In the 2010-11 fiscal year, the tax brought in $329,563.
During the past fiscal year, $346,695 was generated from the tax.
“It’s just for the General Fund to build it up so we can operate services like we’re operating,” Mayor Crupper said. “We’re digging into the reserves every year and we’ve just dug it all out.”