City staff warns of likely state bill to centralize collection of occupational taxes; council urged to consider a resolution

City staff warned the council a bill likely to be introduced in Frankfort would mandate centralized collection of local occupational license fees and urged council members to prepare a local-resolution response to preserve local control and revenue.

Josh Hunt said the Kentucky League of Cities (KLC) expects legislation to be introduced that would transfer collection of local occupational fees to the state or to a state-appointed third party and possibly allow the state to assess a collection fee. Hunt said similar efforts were attempted previously (noting a 2012 attempt) and that local governments use occupational fees to fund essential services such as police, fire and infrastructure.

Hunt said the proposed change is being framed in Frankfort as a pro-business measure to reduce red tape, but city staff and other Northern Kentucky jurisdictions see it as a preemption that would remove local oversight and could reduce net revenue returning to cities. He recalled earlier state takeovers, including police courts and parts of the telecommunications tax, where promised hold-harmless arrangements did not fully protect local revenues.

Staff told council a regional group of cities and counties has already passed similar resolutions opposing centralization and asked Florence to consider taking up a mirror resolution at its next meeting. Councilmembers at the meeting urged colleagues to read the resolution, contact legislators and make their views known when the bill is introduced.

No formal vote or resolution adoption occurred at the meeting; staff said the formal resolution would come to the council for consideration next week.