By Ed Green
P3 Kentucky Editor
For more than a year, P3 Kentucky has been writing about Madison County Fiscal Court’s innovative plan to develop a comprehensive Healing Center to help address the county’s growing drug epidemic and severe overcrowding in its jail due to drug abuse. It’s a real problem that is draining the county’s financial resources and having a severe impact on the community’s workforce and economic development potential.
Last week, county leaders took a bold step to address both the overcrowding and the drug epidemic with a proposed “hybrid” plan that includes building a $17 million Healing Center and a $20 million jail expansion. (To watch the county’s presentation on Facebook, click here.)
To fund both projects, the county is considering imposing a local government premium tax. The tax could generate $4 million to $6 million in revenue annually for the county, and it would easily cover debt payments on the project and provide additional revenue for county government, according to Deputy Judge/Executive Colleen Chaney.
As leaders explained during a special Fiscal Court Meeting last week, the tax is a necessary step to generate funding in a county that brings in only about $9 million per year in occupational and property taxes.
“The only option we have to increase revenue is to increase business in the county,” Chaney said during the Fiscal Court meeting. “The only way for us to have increased business in the county … is to invest in infrastructure. And infrastructure is expensive to invest in. You’re talking water, sewer, other types of projects to be able to get businesses.”
Among the alternatives to raising revenue is to make drastic cuts to a wide range of services, such as road paving projects, mowing, moving to critical-only snow removal, selling property, reducing staff, eliminating the fire department and moving to a volunteer only system or closing the parks system.
“Counties don’t have a lot of options to raise revenue,” Madison County Judge/Executive Reagan Taylor said. “That’s one of the challenges counties face today, and that’s all 120 counties.”
According to John Farris, founder of Commonwealth Economics, 37 Kentucky counties and 357 cities currently impose an insurance premium tax. Farris, a member of the P3 Kentucky Roundtable, is the county’s financial adviser who has been working with Madison County leaders to develop the Healing Center project. P3 Kentucky Roundtable member Jackson Kelly PLLC is the county’s legal adviser.
“As long as I’m here, and as long as my community wants me here, we’re going to invest in solutions. We’re not going to invest in things that don’t work and that are proven not to work. In all the research that we’ve done, there are two things that are not working, and that’s factual, and that’s arresting and that’s incarcerating.”
The premium tax is expected to be discussed again at the next fiscal court meeting on Aug. 14.