, Corbin, KY

Local News

June 18, 2014

Corbin to take issue to state Supreme Court

Comes after Court of Appeals agrees with Knox court on occupational tax ruling

CORBIN — By Jeff Noble / Staff Writer

The occupational tax issue between the City of Corbin and Knox County is going to the state’s highest court.

Both Corbin Mayor Willard McBurney and Nick Birkenhauer, the attorney handling the case for Corbin and former City Commissioner Joe “Butch” White, confirmed this week their side would file briefs with the Kentucky Supreme Court to have them hear the case which has been a burning issue since 2008.

The decision came after the Kentucky Court of Appeals agreed May 23 with an earlier ruling, made in May of last year by Vice-Chief Circuit Judge Greg Lay in Knox Circuit Court.

That decision granted Knox County a summary judgement and denied Corbin one.

In his decision, Lay said Corbin lacked standing, that petitioner White (who was named in the lawsuit) has standing, and that the contested 2012 amendment — Senate Floor Amendment 1, authored by Senate President Robert Stivers (R-Manchester) — did not run afoul the prohibition against special legislation contained in the Kentucky State Constitution.

Lay’s ruling also said the contested amendment isn’t arbitrary, does not violate the state Constitution, and does not arbitrarily discriminate.

“I got the ruling a week ago last Thursday. I wasn’t surprised in the Circuit Court ruling, but I was surprised in the Appeals Court ruling. They just stayed with Greg Lay’s ruling. I don’t think they put any thought into it. I was disappointed because this was steamrolled through the General Assembly. We feel like we should share in the occupational tax. We’re going to take this to the Kentucky Supreme Court. They’re working on the briefs right now,” McBurney said Monday.

In a phone interview Tuesday from his office in the northern Kentucky city of Crestview Hills, Birkenhauer added the Court of Appeals affirmed all points of the Circuit Court ruling.

“The Court of Appeals ruled in Knox County’s favor and Judge Lay’s favor. Mayor McBurney and the City Commissioners would like to ask the (state) Supreme Court to review the constitutionality of the 2012 legislation that prevented the City of Corbin from enforcing the prior judgement that they won. We’ll be filing with the Supreme Court within the next week. Then, Knox County has 30 days to file a response. It may take a few months for the Supreme Court to take the case,” he said.

The first lawsuit between Corbin and White against Knox County was in April 2008, when Circuit Judge Roderick Messer ruled in favor of Corbin letting its residents credit the amount they pay to Corbin against the Knox County tax.

In April 2010, a second suit was filed in the state Court of Appeals, which also named White and Corbin as plaintiffs in the lawsuit with Knox County. The appeals court ruled that Corbin had no standing in the case, only White, in October of that same year.

Knox County filed with the state Supreme Court a motion for discretionary review of the appeals court’s standing in January 2011. In February 2012, both sides were notified by the Kentucky Supreme Court, saying they would refuse to make a decision, which left the appeals court’s ruling intact.

In June of that year, Corbin filed suit against Knox County over the issue of getting the occupational tax from Corbin residents who live on the Knox County side of the city. It named the city and White as petitioners.

On Aug. 28, 2012, Corbin filed a motion for a summary judgement in the court, asking to make Senate Floor Amendment 1 unconstitutional.

The amendment required any set-off or credit of city license fees against county license fees existing between a city and county as of March 15, 2012 to remain in effect as it was on that date. It also prohibited the provisions of a state statute from applying to a city and county, unless the city and county have both levied and are collecting license fees on March 15, 2012.

On April 25, 2013, Judge Lay took the case under submission in Knox County Circuit Court. He heard attorneys from both sides argue their cases for the two governments for about 90 minutes.

Meanwhile, in April of this year, during the Kentucky General Assembly’s special session, a transportation bill — House Bill 236 — included an amendment filed by Stivers that would retain the original provisions, amend a state statute to extend the freeze on the credit of city taxes against county taxes to July 15, 2016, clarify situations in which the credit freeze applies, and establish a reduced credit in certain circumstances. It passed both houses.

Gov. Steve Beshear line-item vetoed three parts of the bill which dealt with spending on April 25. In Kentucky, the Governor can line-item veto specific items in spending measures, but not in other sorts of legislation, without vetoing the entire bill. In this case, the bill was a funding measure. However, Beshear did not veto the provisions Stivers inserted, so both the bill and the amendments are law — minus the items he did veto.

Birkenhauer said what happened with the 2012 amendment happened again two years later.

“Sen. Stivers pushed the same legislation on the very last day of the session, and the new one goes through 2016. It’s like saying, ‘When’s it going to end?’ We’re asking the state Supreme Court that this is unconstitutional and all this is doing is repeating itself,” he noted.

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