Kentucky Senate President Robert Stivers spoke to the Corbin Kiwanis Club last week.
In a twist of fate, State Senate President Robert Stivers (R-Manchester), whose district has included Knox County and that part of Corbin, now represents Whitley County, and all of Corbin.
Stivers was in Corbin Wednesday as the guest speaker of the Corbin Kiwanis Club. As part of a question-and-answer session, Stivers addressed a big point of contention between himself and Corbin residents, the 2012 Senate bill known as the, “Stivers Amendment,” which Corbin officials say has precluded the city from sharing in the occupational tax revenue collected from businesses located in the portion of Corbin located in Knox County for almost.
The amendment passed by the general assembly in 2012 as part of the tax amnesty bill delayed Corbin’s right to draw on the occupational tax until July 1, 2014.
At the time it was passed, Stivers defended the legislation, saying without that revenue, Knox County would be unable to provide necessary services to its citizens.
Corbin officials have previously noted Knox County and Barbourville have an agreement in which the county and city divide the revenue generated from the county’s occupational tax on businesses within the Barbourville City Limits.
Corbin and Williamsburg both have a similar agreement with the Whitley County Fiscal Court concerning the Whitley County occupational tax.
Corbin officials estimated in 2012 that the city was being deprived of more than $1 million in tax revenue, annually.
Stivers noted Wednesday that part of the existing law set a population threshold of 30,000 county residents as the point at which employees within a city could get a tax credit toward a county’s occupational tax, if the city had also instituted one.
“I understand what each entity wants to do,” Stivers said. “I understand why they want to do it and how they want to do it. But the whole system, whether it is here, whether it is populations over 30,000 or in my hometown, which is a population under 30,000, or a situation in Winchester in Clark County, where Winchester city keeps incorporating more land area to gobble up more employment and erode the tax structure of Clark County, it is much more dynamic than what people want to think because it is a tough issue.”
Stivers said an amendment he added in 2006 at the request of then Senate President David Williams (R-Williamsburg) was attached, changing the wording from a city shall lie in a county to a city may lie in more than one county.
“That gave Corbin the legal argument that it could collect against the Knox County occupational tax,” Stivers said. “I didn’t realize what the impact of that was going to be.”
Stivers added that the Corbin City Commission and the Knox County Fiscal Court were both trying to do what is best for their residents and he understands that is what they should be doing.
“The system as a whole is not a good system,” Stivers said of the state’s tax system with regard to the occupational tax, reiterating that Kentucky’s 120 counties are treated differently depending on whether they fall above or below the 30,000 population level. “The whole system needs to be repealed and start over. How do you treat Clay County different than you do Knox County or Laurel County?”
Under the current system, Stivers noted the people of Manchester would pay two percent occupational tax should Manchester and Clay County both enact an occupational tax, while the people of Williamsburg only pay one percent.
“The whole system is wrong.”
Stivers said he has asked representatives from the Kentucky League of Cities and the Kentucky Association of Counties (KACO) to work together to develop an appropriate taxing structure to best meet the needs of city and county governments throughout the state.
“There are so many county services that are provided and so many city services that are provided. I don’t think anybody has ever sat down and looked at an accounting of who does more of what, but really you can’t,” Stivers said. “You kind of have to start blurring the lines somewhere and people need to figure out what the solutions are instead of creating problems.”
Former Corbin Economic Development Director Bob Terrell told Stivers that the amendment put Corbin in an awkward position, as Corbin residents do not benefit from the Knox County occupational tax, while occupational tax money collected in Whitley County was being used to fund projects in the Knox County side of Corbin.
Terrell added that Corbin funded the two business parks located in the Knox County portion of Corbin, but does not see any of the occupational tax revenue from the businesses.
Stivers pointed to the Knox County Detention Center and the Knox County Clerk’s annex in Corbin as just a few examples of services the county provides without funding from the City of Corbin
Stivers added that before the amendment was passed, he came to Corbin to speak with Mayor Willard McBurney and attempt to negotiate an agreement that would alleviate any fears they may have about its effect on the city or its agreement over sharing occupational tax with Whitley County.
McBurney said Stivers did come but it was not to negotiate. McBurney said Stivers came in about 8 a.m. on a Sunday and announced his intention to attach the amendment to a bill.
When asked why he was doing it, McBurney said Stivers said it was in the best interest of the majority of the residents in Knox County.
Despite past differences, McBurney said Stivers’ district includes all of Corbin and he and the city commission wants to work with Stivers for the betterment of the city.
“We are extending the olive branch,” McBurney said. “I am not going to slam the door in anybody’s face.”
