Thursday, January 18, 2001

Business council fights tax

By Cindy Schroeder
The Cincinnati Enquirer

        COVINGTON — The Covington Business Council has joined Corporex president Bill Butler in seeking to nullify a Kenton County payroll tax cap hike.

        Effective Jan. 1, the county payroll tax cap — the maximum amount on which the tax is collected — rose from $25,000 a year to $76,000 a year.

        When the payroll tax cap hike originally was approved last June, county officials said it was to build and operate a new jail to replace the overcrowded facility in downtown Covington. Kenton Fiscal Court later decided to expand the current jail.

        On Jan. 4, Mr. Butler, whose Corporex Cos. has more than $300 million invested in Kenton County projects, sent a letter to tenants at his River Center office towers in Covington, asking them to join his fight to nullify the payroll tax cap hike, Corporex spokeswoman Laura Cook said.

        Since then, “nine very large companies” have approached Mr. Butler to discuss possible support of his efforts, Ms. Cook said. She declined to identify the companies.

        “I think any business has grounds for challenging the (county payroll tax cap hike) based on the law,” said Cindy Shirooni, chairwoman of the CBC Board of Directors and a lawyer at a Covington firm. The non-profit business organization is concerned with improving the business climate in Covington.

        Ms. Shirooni said that careful study of a new state law indicates that Covington may seek a credit for Covington workers who are not only paying 2.5 percent on salaries up to $60,000, but also 0.85 percent now on salaries up to $76,000.

        She also described the payroll tax cap hike as “a disaster for economic development in Covington,” when it comes to attracting new businesses and encouraging expansion of existing ones. She added the CBC has lobbied to reduce Covington's 2.5 percent payroll tax — one of the highest in the area — since 1996.

        “It is grossly unfair to pay for another citizen's jail responsibility by taxing the salaries of new employees at River Center, many of whom are non-residents of our county, but yet contribute to our economy,” Mr. Butler wrote in his letter to his River Center tenants.

        Kenton County officials could not be reached for comment Wednesday, but they have previously said that they disagree with tax critics' logic, and believe they acted legally on the payroll tax cap hike.

        Kenton County officials have projected the increase will bring in about $5 million more a year for expansion and operation of the jail.

        On Tuesday, Kenton Fiscal Court approved a resolution that would enable the county to issue bonds to cover the expansion and renovation of the jail.

        The resolution limits construction costs to a maximum of $30 million. Consultants have estimated the $27.3 million project will take more than two years to complete.

        On another issue, the CBC announced that it supports the City of Covington's appeal of a recent Covington Board of Adjustment decision that cleared the way for construction of the $4 million Life Learning Center in a 120-space parking lot at Eighth and Washington Sts.

        The center would cater mainly to the homeless, providing a medical clinic, 10 transitional apartments for residents coming out of alcohol and drug treatment, and a place where the homeless could store belongings, change clothes, take showers, pick up mail and use a phone to contact prospective employers.

        “The CBC is not against the concept of the Life Learning Center,” Ms. Shirooni said. “It's simply the location. That's a prime piece of real estate. Right now, it's being used as a parking lot, and it's the only parking for businesses in that area.”

        While the city plans to build a 400-space parking garage at Fifth St. and Scott Blvd., “that's not built yet,” Ms. Shirooni said.


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