, Corbin, KY

Local News

October 24, 2012

City waits for decision on occupational tax issue

CORBIN — By Jeff Noble, Staff Writer

The City of Corbin is looking ahead to late December, to see if a decision will be made over the issue of getting the occupational tax from residents who live on the Knox County side of the city, better known as East Corbin.

Corbin Mayor Willard McBurney said Tuesday the city filed a motion for a summary judgement in Knox Circuit Court, asking the court to make a single section of a bill — Senate Floor Amendment 1, that was attached to House Bill 499 and passed by the state legislature in March — unconstitutional.

McBurney stated during an interview at Corbin City Hall that the amendment, authored by 25th District State Senator Robert Stivers (R-Manchester), has prevented the city from collecting its own occupational tax revenues from Knox County.

“We filed suit for the summary judgement on Aug. 28. We’ve spent close to $200,000 in legal fees because of these lawsuits. We went through a lawsuit and we won every appeal. What Stivers did to roughly 1,500 citizens of East Corbin was to have very little regard for the judicial system. He threw those citizens under the bus. We hope the court will have a decision by the end of this year,” he noted.

McBurney and the Corbin City Commission support the process of letting city residents who live in the Knox County side of town “offset” their county’s tax with their city tax.

“We could use that money for infrastructure that needs to be replaced, and we’re doing that with Whitley County occupational tax money, and now with the city’s alcohol sales tax money. And here’s one of our lawmakers who does this to make us spend more money in the courts. What confuses us is that Stivers has no regard for them, the residents of East Corbin. We can’t figure out why somebody would do this, and not represent his whole district. It’s wrong. If he did that to East Corbin, what would he do next?” McBurney said.

The mayor said in an April interview that Corbin would like to have an agreement with Knox County similar to what the city has with Whitley County. At present, Corbin and Whitley County share the occupational tax revenue, with the city getting 75 percent, and the county getting 25 percent. Knox County has a separate agreement with Barbourville, where 32 percent of the county’s occupational tax goes to that city. That revenue amount for Barbourville will go down to 25 percent later this year.

McBurney added the controversy over the occupational tax issue is still going on, and that it’s not over with.

“I don’t think the citizens know the consequences. We’re probably the only city in the nation that is paying another city. Barbourville gets probably what we figure is approximately $100,000 a year from us. … We weren’t collecting because it would double tax the citizens of Knox County. … We’re bearing the brunt of this, the citizens on the Knox County side of town are bearing the brunt of this, and we will prevail,” he said.

The amendment to House Bill 499 would require any set-off or credit of city license fees against county license fees existing between a city and county as of March 15 of this year to remain in effect as it was on that date. It would also prohibit 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 of this year.

House Bill 499, with the amendment attached to it, was signed by Gov. Steve Beshear in April after he called the state legislature into a special session. McBurney said in April the bill was an emergency bill dealing with Kentucky getting more revenue, and because it was not a regular bill, it could not be line-item vetoed.

On June 21, McBurney and the Corbin City Commission voted unanimously to authorize attorney Todd McMurtry of Crestview Hills in northern Kentucky to file a lawsuit against the Knox County Fiscal Court. The suit named the City of Corbin and current City Commissioner Joe “Butch” White as petitioners. In the suit, White was named as a petitioner because his home and business are located in the Knox County part of Corbin, and was “subject to the occupational license fee ordinance of both Corbin and Knox County.” The suit was filed in Knox Circuit Court the next day.

McMurtry handled Corbin’s case in the Kentucky Supreme Court last fall. In February of this year, both sides were told by the state Supreme Court that the court refused to make a decision on the case.

In a June interview, McMurtry said, “We’re alleging the legislation is unconstitutional. One, because it’s special legislation passed in the General Assembly. And second, it’s what they call ‘log-rolling,’ which is something that there was some ‘horse trading’ in the Senate which attached the Stivers amendment to a piece of legislation that had nothing to do with the legislation.”

The legal battle between the two governments has been going on since the first lawsuit was filed in 2008, with both Corbin and White named as plaintiffs.

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