Vanceburg eying tax hike to pay for health insurance

May 26, 2017


Members of Vanceburg City Council will be meeting in a special session at 5:30 p.m. Thursday, June 1, to “discuss options to generate revenue to secure employee health insurance as it pertains to the budget.  (The meeting had earlier been scheduled for Noon on Tuesday, May 30.)

Council members met in a special session Thursday evening “to discuss the employee health insurance” and were told that to maintain the present level of coverage for city workers the rate will increase by 12.1 percent.

During Thursday’s session members discussed increasing the payroll tax to pay for health insurance for city employees.

Vanceburg’s payroll tax is paid by nearly everyone who is employed, or works, inside the city limits.

Currently there are 11 city employees receiving health insurance benefits from the city. Of those, eight are on a family plan; one for an employee and child; and two on single plans.

The city pays 100 percent of the premiums for employee and family plans. The cost over the past fiscal year has been about $139,000, according to City Clerk Jeana Billman.

“We run a tight budget,” said Mayor Matt Ginn. “If we need equipment for our police department we need to look for grants to pay for it.”
He added the monthly expense for utilities is between $7,000 and $8,000.

Ginn said a city budget must be drafted by the next regular council meeting on June 5. “We need to have a special meeting (before then) to solve our budget.”

Heidi Lynn, Administrator of Member Benefits for the Kentucky League of Cities, presented some different options during the meeting that would lower premiums but would cost employees more through higher deductibles and out-of-pocket expenses.

In some of the proposed options the city would only pay for the employee portion of the cost with the employee paying the difference to cover family members.

One option, that would amount to an annual savings of $46,000, is for the city to pay 100 percent of the premium for the employee and 75 percent of the premium above that for additional family members.

“One option would be for the city to pay 100 percent on the employee only,” Lynn said. “That would save the city a lot of money.”

“We’ve paid for full insurance for a very long time,” Ginn said.

“I make $308 a week (as mayor), Ginn said. “I depend on this health insurance to take care of my family.”

“It’s something that’s been coming for a long time,” Ginn added. “The money we’ve made on recycling has helped but I think something is going to have to be done.”

Ginn said the health insurance benefit for employees is an incentive to keep them from seeking employment elsewhere by compensating for the low wages they receive working for the city.

In discussing the options during the 55-minute session, the possibility of raising the payroll tax was raised.

“We need money in our budget,” Ginn stated.

Jeana Billman said the city’s annual income from the one percent payroll tax is about $240,000.

Doubling the tax would increase the city’s income by $240,000.

“If you make $500 a week, who is going to notice the (extra) five dollars (in payroll taxes)?” Ginn asked.

Vanceburg Police Chief Joe Billman suggested looking into annexing more property and businesses into the city limits.

City Attorney Lloyd Spear asked how much the city receives in property taxes each year.

Jeana Billman replied the annual income from property taxes is about $38,000.

“We may want to look at (the possibility of increasing) property taxes pretty hard,” Spear said. The rate on real property in the city limits is currently 13 cents per $100 valuation.

“I would like to study the insurance more,” stated Council Member Kathy McCann.”

Council members Matt Jarrells and Shane Hull were absent from Thursday’s special session.

Thursday’s special meeting will be at 5:30 p.m. at the William T. Cooper Municipal Building in council chambers.

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