Wednesday, July 04, 2001

Money for jail axed in budget

Cut won't limit social services

By Ray Schaefer
Enquirer Contributor

        INDEPENDENCE — Kenton Fiscal Court on Tuesday chopped a bit more than $40.5 million from its recently approved budget because no money is available for the proposed jail.

        As expected, the $38 million slated for the jail was the biggest cut. But the county also cut $300,000 from its road fund and just more than$266,000 for bus replacement from the Transportation Authority of Northern Kentucky budget.

[photo] The Kenton County Building will continue to house inmates after more than $40.5 million was cut from the county's budget.
(Enquirer file photo)
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        Judge-executive Dick Murgatroyd said there might never be a new jail if the county loses an appeal in the Kentucky Supreme Court regarding an increase in the payroll tax cap. The county raised the cap to bring in more money for the new jail, but a lower court ruling in a lawsuit has negated much of the anticipated increase.

        “We will keep the jail at 303 Court St. and make the best of a bad situation,” Mr. Murgatroyd said of the jail's current location at the county courthouse in Covington.

        The lawsuit was filed by the City of Covington, Corporex Companies, SECO Electric and the Greater Cincinnati Construction and Building Trades Council.

        The suit is in connection with the county's attempt to increase its payroll tax cap — the top amount of income that can be taxed — from $25,000 to $80,400, which increased the county tax level to the same as the Social Security cap.

        Kenton Circuit Judge Patricia Summe ruled in favor of Covington and the other plaintiffs, saying those paying Covington payroll taxes should be credited for that amount against the county tax.

        Before that ruling, it was estimated the increase would have raised just less than $7 million a year for the jail. The county was prepared to issue bonds for the remainder of the $38 million it would have paid for the jail in the current fiscal year.

        The county originally passed a $106.7 million budget last month for the fiscal year that began Sunday, despite the possibility that money for the jail and other agencies might not be available.

        County Treasure Ivan Frye said the biggest hit Tuesday was the $6.8 million the county won't be getting from the payroll tax.

        “That's the real story,” Mr. Frye said. “The impact of that is, (there's) no money to give to the road fund, and we have to transfer $3 million from the general fund to the road fund. The jail has disappeared from the general fund.”

        Other parts of the budget were hit, too: a $100,000 cut for purchase of asphalt; $40,000 for vehicle parts; and $10,000 for equipment repairs.

        Mr. Murgatroyd said the county would continue social services regardless of what happened to the budget. Services will remain at current levels, but at the expense of reserve funds.

        The Mental Health/Mental Retardation fund reserve went from $1.2 million to $800,000, and Senior Services took a $50,000 hit, seeing its reserve go from $334,000 to $284,000.

        But Mr. Murgatroyd said there is no reason to worry yet.

        “The county is on sound financial footing,” he said.


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