GLASGOW, Ky. – Those that work in Glasgow may see an uptick in the percentage of occupational tax they pay to the city due to revenue deficits.
Glasgow is facing budget shortfalls, which mainly developed from a lack of occupational tax over the last several months. With the departure of LSC Communications and Sitel in Glasgow and the loss of jobs due to the coronavirus, the hit to the budget is causing concern for the City Council.
“When I look at this budget, I’m concerned about this budget,” said Councilmember Terry Bunnell.
Revenue generated last fiscal year from occupational tax constituted 69 percent of the total revenue. The projected revenue from that same tax during 2021 is 54 percent.
The occupational tax rate sets at 1.5 percent, but members of the Finance Committee are considering a raise in that rate.
Bunnell proposed a .25 percent increase, which would make the new rate 1.75 percent.
“We’re all going to suffer,” said Joe Lascala, a finance officer with Glasgow Municipal Government. “We’re not just throwing this on the property tax owners. All of us are going to suffer.”
For clarity, someone who makes $20,000 per year would pay $50 more in occupational tax during the year. That equates to approximately $4.16 per month.
W2 wages are taxed under the occupational tax. Social security and other benefits are not influenced.
While the effect would not be immediate, Mayor Harold Armstrong said the increase could be felt about two years from now. That increased revenue would help offset losses suffered during the next fiscal year.
COVID-19 concerns continue to limit the ability to draw new business to Glasgow. Due to the loss of several jobs and the ongoing layoffs, Armstrong said the city’s unemployment rate sets at 14 to 15 percent.
The committee is set to convene at Glasgow City Hall on June 24 at 5:30 p.m. and July 1 at 5:30 p.m. to discuss the possible revision of the city’s investment policy. The city could potentially reap benefits from investments, but current regulations prohibit that method of revenue generation.
The Glasgow City Council meets June 22 at 7 p.m.