MURRAY — The Personnel and Finance Committee of the Murray City Council Thursday evening unanimously approved drafting an ordinance that would result raising the 2021 tax rate in the city by half a cent.
The proposed rate of 31.54 cents per every $100 of property assessed represents a projected 4% increase in revenues from the previous year. That 4% increase is the maximum allowable under Kentucky law and would result in increased revenues of about $57,000. That is up from the 31.1 cents that has been in effect since being approved in 2018.
City of Murray Mayor Bob Rogers led the discussion during the committee meeting and said the ongoing COVID-19 pandemic accounts for much of why he thought the hike is necessary.
“I will call your attention to the permissible taxes that we are allowed to levy and, this year, the revenue for most of those is anticipated to be decrease,” Rogers said, leading off a list of areas where revenue will drop with the lowering of the city’s tax on alcoholic beverage sales going from 8% to 5%, which was approved later in the meeting.
That came as a result of a lawsuit filed by a Murray company — Bfc Enterprises — that challenged the legality of the 8% tax that was set in 2001 after Murray voters allowed liquor to be served in certain restaurants. That was expanded in 2012 when package liquor sales were approved by voters. The drop to 5% appeared as a first reading item on the council’s agenda during its last meeting of August and came after a lengthy executive session a few weeks earlier in which the council entered into a settlement of the case.
“Tonight, you’re going to vote on lowering the rate for the alcohol tax and that’s going to mean about a $315,000 decrease in your revenue,” Rogers told council members before continuing with the list. “The payroll tax in the month of June decreased about $106,000 and I got a report today from our business license person that the number of business licenses sold this year is down between 40 and 50 businesses.
“And so, all of those permissive taxes that have been bringing in revenue, because of the world we live in today, we can anticipate a little less money from those.”
In addition, the city’s utility fund is taking a hit because more than $100,000 in payments for city utilities have not been paid by homeowners//tenants. Some of that is due to the residents not being able to pay those bills because of loss of income caused by the pandemic.
“We are seeing those numbers growing and starting to become a problem,” said Councilman Danny Hudspeth, who is also a member of the Murray Electric System board and was reporting what is being discussed with that group. “A lot of people can’t pay, but there are some others who aren’t going to pay because they’re watching someone else not pay and getting away scot free, while others are thinking the government is going to come in and excuse all of that, and I don’t anticipate that.”
The earliest an ordinance would be presented to the full council would be for its next meeting at the end of this month. That would, more than likely, result in a first reading of the ordinance. The custom since Rogers took over as mayor in January 2019 is for first readings to essentially have no discussion, with that being saved for the second reading, which is also where council members will cast their votes.
This will mark the first time the tax rate has gone up since 2013. Rogers said that was when the council voted on a 42.6-cent rate that remained in place until the 2018 vote that dipped it to its current rate of 31.1 cents.
Rogers, using previous records, said the council enacted a tax rate of 39 cents in 2005 that produced a little over $2 million in revenue. He said that rate was increased a little bit each year until it went to 42.6 cents in ’13.
“That tells that you haven’t actually raised this tax in the city of Murray since 2013 and, since 2005, it has actually gone down from 39 cents to 31 cents. You’ve kept the tax rate low,” he said, explaining the proposed hike. “This is not 4 cents. It’s 4%. That means you set the tax rate to receive 4% more revenue than you receive the current year.
“A way to look at this is, on a $100,000 house, that would be $5.40. On a $150,000, it would be a little over $8.”
Councilwoman Rose Ross Elder, who serves on the committee, said she believes the proposed hike is the correct move.
“I feel that with the current situation, that raising it half a penny is probably prudent,” Elder said. “We have the alcohol tax, people not paying their taxes … I don’t think that would be that big of a hardship.”
“If it had not been for the coronavirus, I don’t think, in good conscience, I could raise the taxes, but in view of what Councilwoman Elder said, this is a small thing to do,” said Councilman Dan Miller, who also serves on the committee.
Rogers announced Thursday that the annual spring brush pickup for city residents will happen after all, just much later than planned.
Because of Class D inmates with the Calloway County Jail not being available because of the pandemic, this activity has been delayed, but Rogers said residents who have waited since, in some cases, March or April, to have brush removed will have that chance, starting Monday.
He said the city’s website — www.murrayky.gov — will have information available and will provide a daily tracker to tell where workers are in the process.
Also, Rogers announced Thursday that City Hall will get involved with attempting to improve the city’s participation on the 2020 United States Census. He said the latest figures he saw show that Murray residents have responded at about a 63% clip, and that, he said, is too low. So, starting from 10 a.m. until 2 p.m. Monday, and continuing during those same hours each Monday and Friday for the foreseeable future, City Hall will become a place anyone who has not participated in the Census can become part of the quest to count every person in the country.
Rogers reminds residents that this is not just about determining population. This also goes a long way to determining which communities are better positioned to receive funds for various federal and state programs.