By Jacque Day
http://stream.publicbroadcasting.net/production/mp3/wkms/local-wkms-894196.mp3
Murray, Ky. – The Murray City Council continues efforts to close a budget shortfall for the next fiscal year. Meanwhile a local civic organization surveyed its members on one of the hottest questions on the table: payroll tax, yes or no. Jacque Day has this update.
SCRIPT
Mayor Danny Hudspeth opened the budget discussion at the March 25 City Council meeting with a prepared statement: "I do not wish to be an alarmist, but unless the city takes steps to enact an earnings tax, the city must substantially lessen the services."
But hold the phone. These aren't Mayor Hudspeth's words. Listen on: "That was a part of a statement given in October of 1987 by Mayor Holmes Ellis. [Jason Pittman: And we've been making it ever since.] And we've been making it ever since."
Thus commenced a discussion that easily dominated half of the two-hour session: what to do about a projected $1.1 million dollar shortfall in the city budget for fiscal year 2010-2011.
"Option Number 1 is, read my lips, no new taxes and we cut about 20 percent out of the existing operating fund. Option 2 is some form of revenue increase and some minor/major cuts t get us to where we need to be. And Option 3 is the same revenue study; one option of increasing revenues is that it may include a payroll tax."
The first to respond was council member John Bowers. "I think we have to do something other than suggest cutting operating expenses 20 percent. I've talked about this, and I hate to keep bringing it up, but you're going to have to initiate a payroll tax to cover it all so you won't have to go over this barrier again ten years from now."
Councilman Greg Anderson followed. "I think we really need to take a hard look at what our priorities are as a city. And I think too there's another thing. I think we're moving very fast on this payroll tax."
Jason Pittman cited the current fiscal year's budget, which city finance director Alan Lanier reports is already operating at an $840,000 deficit. He says he's "all for conservative budgeting," but feels it's necessary to take a closer look at the numbers. "I don't have any problem looking anybody out in the community in the eye and saying: We have exhausted all our efforts. We have exhausted all of our avenues within our city. We have cut what we can cut. We're there. We need it. I don't feel like we're there yet."
Meanwhile last week, the Murray-Calloway County Chamber of Commerce embarked on a budget quest of another sort. Executive director Lance Allison says the Chamber board assembled a survey and emailed it to its membership in an effort to gauge how members wanted the organization to respond to a proposed payroll tax. Allison says, even the early numbers were telling of the positions of the Chamber's some 670 members.
"It's showing that they are not in support of a payroll tax."
In fact, the membership's opposition is overwhelming. According to the survey results released Wednesday, 82 percent of 240 respondents said "No" when asked if they supported a payroll tax.
"And then the next question leads you to: Do you think that other options have been researched thoroughly? And you're seeing kind of a close number of people feel like that they [the council] haven't looked at everything they need to look at before they go the payroll tax route."
The majority of respondents, 60 percent, were small businesses with 1 to 15 employees, says Allison. "Coming from a small business background myself, I would say that you're going to see your small person against this simply because it's eating into their bottom line. It's hard enough right now for a small business person to stay afloat, without adding on any new taxes."
Marc Peebles owns and operates Innovative Printing, a small business on the north side of town. He's also on the city's planning commission, the boards of Murray Main Street and the Chamber of Commerce, as well as a community board member for Heritage Bank. He looks at the budget problem from multiple vantage points. "Purely as a business owner, I'd be against it, because it's going to be an increase on my employees that if I want to keep them whole, I'm going to need to increase their wages to cover this payroll tax." He also makes this point: "If we indeed are falling behind in being able to keep up with the expenses of this city, then perhaps a payroll tax is a better way to collect and more fair than trying to do the city sticker. Don't know that until we see some numbers."
Coming up with those numbers over the next few months will be a primary challenge for Murray's city council, and they've got their work cut out for them. Lance Allison says, based on the survey results, the Murray-Calloway County Chamber board has voted to draft a letter asking the council to slow down.
Marc Peebles says what the city needs is an honest eye-opening discussion about where we want to go as a community. He also adds, in a down economy if there are some things we need to give up, and cut back on and curtail and tighten our belts for a short period of time, he doesn't necessarily believe that's moving backward. He thinks it's just answering to the economic times.