Boyd tax will cost Ironton

Published 12:00 am Friday, June 6, 2003

A recently passed income tax in Boyd County, Ky., may benefit those who live on the other side of the river, but it will cost the city of Ironton more than $65,000 a year.

The new 1-percent payroll tax that goes into effect July 1 means Ironton residents who work in Boyd County will now pay Boyd's 1 percent tax instead of Ironton's, City Finance Director Cindy Anderson said.

Several larger business in Boyd County such as Ashland Oil Inc., AK Steel, the Big Sandy Electric Plant and the federal prison employs many Ironton residents, although it is unclear exactly how many, Anderson said.

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"It is another blow to our income tax," Council Chairman Jesse Roberts said. "That seems to be where the hits keep coming."

People pay an income tax where they work, but if there is no income tax, they pay where they live. Because of a reciprocal agreement that has been in place for years, the city will honor 100 percent of the tax up to the total of 1 percent, Anderson said.

This just adds to the recent trend that has continued to cost Ironton money.

Ashland passed a payroll tax in 1999 and Russell passed one the following year.

In past years, Ironton had income tax revenue of nearly $2 million a year. Because of the neighboring payroll taxes and the loss of businesses such as Intermet and Allied Signal, Ironton's income tax revenue has dropped to approximately $1.55 million, Anderson said.

Despite the losses, Mayor Bob Cleary said the city will be able to handle it.

"Any time the city loses revenue, it creates problems with our budget because we are always running so tight,"

said. "I do not think we will feel the full impact until next year."

Income taxes can only be raised above 1 percent by the voters, but

Cleary said raising taxes or creating a double taxation on people who work in Boyd County is not an option.

"There is no way I would support adding additional taxes to the citizens of Ironton to make up for the loss of income," he said. "We need to look at new job creation.

"We are working real hard to bring some jobs into Ironton. I think we have a a couple of good prospects and may make an announcement in the near future."

Although there is probably not a problem with it, the mayor has requested a copy of the ordinance and asked the city's attorneys to look over the legality of the tax, Cleary said.