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Magistrates reach compromise on insurance tax

Rate will drop from 9% to 6.5% with surplus earmarked for roads

By Jeremy D. Wells

Carter County Times

Citizens, magistrates, and the judge executive made compelling arguments for and against sunsetting a portion of the county’s insurance premium tax during fiscal court’s regular meeting on Monday night. What the county finally settled on, however, was a compromise that sees the tax reduced while still maintaining a small surplus to be earmarked for road improvements.

The county originally passed the tax increase on insurance premiums – doubling the rate to 9% – to cover the costs of constructing a new jail. With the jail now paid for, the increase was due to sunset, returning the rate to 4.5% unless the county acted to maintain the 9% rate.

While most of the magistrates and the judge executive favored maintaining the current rate, and earmarking all or a portion of the funds for road improvements, magistrates Millard Cordle and Derrick McKinney opposed that move, preferring to have the tax sunset as originally planned.

Cordle specifically called out his colleagues, including former magistrate Mark Miller who spoke during the public comment period, for changing their minds on the tax. They each, however, noted that things have changed drastically since the tax was increased eight years ago, with judge executive Brandon Burton pointing out the floods, ice storm, and multiple related road slips the county has endured over that period and Burton and others noting the rising costs of supplies.

Jeff Flaugher, opening the public comment period, wanted to know why the county felt the need to keep the tax increase if it was only used for the jail previously.

“There wasn’t a revenue problem before (the jail tax), so there shouldn’t be now,” Flaugher noted.

While Burton agreed that the county could continue as they had without keeping the increase, he also noted increases in costs for the county, the existing debt he’d like to pay down, and the need for a slush fund to help the county respond to future emergencies.

“The jail was paid off sooner than planned, and we would like to get our roads up to par,” Burton said. In addition, he noted, “everything has inflated.”

He said the rate has been at 9% since 2016, so everyone knows what to expect with that rate, and that the rate was fairly low compared to some other counties.

“The people in this county deserve better roads,” Burton said, but the county couldn’t give them those roads without a way to pay for them.

Cordle, however, was unmoved.

“I understand we need the money… but (the county) made a promise,” Cordle said, that the increase would be removed.

Burton, however, said the county has a hard time maintaining roads at their current state, much less improving them.

“We want to repair stuff,” Burton said.

Magistrate Chris Huddle said it was important as well from a safety stand point. Noting that the county has roads that are difficult for emergency vehicles to navigate safely, and some that school buses can’t go down, Huddle said, “(the county’s) priority is the safety of our citizens, our kids, and our county employees.”

He also noted that unanticipated costs could hit the county at any time. For instance, Huddle said, if the state decided a bridge was unsafe the county didn’t have the option to repair it later. They would have to repair it immediately, whether they had the money in reserve or not.

Huddle also refuted another claim from Cordle, that the insurance premium tax was an unfair burden, particularly on poor, young, and working class drivers who might not be able to afford insurance because of it.

Huddle said he sat down with his insurance agent and figured out what the difference would be for him if the tax rate dropped.

“I have above average insurance,” Huddle said, noting that the difference in cost for his family, on all auto policies, “broke down to $15.83 a month.”

He added that he would be happy to pay that much if it meant that he wouldn’t destroy his car’s suspension driving on a county road, and that an emergency vehicle could reach its destination safely.

Flaugher reminded Huddle that he had previously been opposed to the tax increase he now wanted to keep, prompting Huddle to respond, “Things change.”

Following Flaugher’s remarks in opposition to the tax, the county heard from another group of residents, along Tara Court, who were experiencing the very problems increased road funds could help address. Their road, which was dropped from county maintenance when it was determined there was no documentation showing it had ever been taken into the county system, has become nearly impassable, with residents parking at the bottom and attempting to walk up the slick, muddy hill. One resident broke down in tears as she related her concerns about elderly neighbors falling in the mud, emergency vehicles reaching them if required, and even being able to get out and buy groceries.

The court moved unanimously to begin the process of taking the road into the county system, and moving magistrate Harley Rayburn to note this was why the taxes needed to remain where they were.

“We have roads you can’t drive,” Rayburn said. “I have a bridge in my district that’s in half… I don’t like taxes, but we have work (that needs done).”

Huddle backed up Rayburn’s assertion.

“We aren’t funding gender studies in Pakistan… it stays in Carter County,” Huddle said of the tax.

Magistrate Derrick McKinney, however, worried that the money would be used for other projects.

“It won’t go to roads,” McKinney said.

The money, he said, would go into the general budget and it would, “be a spending spree.”

Brandon, however, noted that the times the county has had to dip into the general fund to finance other departments has been because those other needs aren’t funded – further pointing to the need to maintain the rate.

Miller, who deflected Cordle’s criticism that he’d previously opposed the tax increase with the observation that “it’s a different world” than it was eight years ago, suggested the county eventually put the issue to voters for a road tax, but until then they “do what they have to do” to keep the county solvent.

After all, he noted, if the county didn’t meet their obligations, the state would come in and take over, and the county “will not like” the tax rates the state sets for the county.

While Huddle and Rayburn were both firmly in favor of maintaining the 9% rate – with Raybourn telling the packed courtroom “you deserve better” roads and infrastructure – Danny Holbrook suggested a compromise rate.

Cordle said he would support a rate of 6%, which would decrease the current rate by 3%, but Holbrook suggested a rate of 6.5%. That rate, which would give the county a full 2% more than they would get if they allowed the rate to roll back, was something that Cordle said he would reluctantly vote for.

“I don’t want to, but I will,” Cordle said.

Huddle, still advocating for the higher rate noted that roads were the one constant request and complaint from county residents.

“I get calls day and night, and it always has to do with roads,” Huddle said. People don’t call and complain about their tax rates, they don’t ask about the budget, he said. They call and ask about the roads.

Holbrook then made a motion to approve lowering the tax rate from 9% to 6.5%, with all magistrates except McKinnney voting in favor of the motion.

After approving the tax, Cordle followed with a motion to earmark the 2% in surplus funds for road work, which passed unanimously.

In other action the county heard from Soil Conservation District spokesperson Will Davis on services offered by the district, and moved to approve their contribution to the service at the same level as the previous year.

The county also approved a motion to accept applications for a single full-time or multiple part-time openings at the animal shelter, approved the appointment of a county application agent for FEMA, accepted the treasurer’s report, and accepted the sheriff’s 2022 fee settlement.

The sheriff presented the county with two checks from that settlement, one for $21,078.76 and another for $4.94.

The sheriff also noted that the county now has 24-hour law enforcement coverage from his office for the first time.

“It’s never been done in Carter County,” Sheriff Jeff May told the court, explaining round the clock coverage has been a goal of his since taking office.

Following a brief executive session the court moved to hire a new solid waste employee before adjourning.

Contact the writer at editor@cartercountytimes.com



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