Response to Insurance Tax article on 4/17/09 in Madisonville Messenger 

 

Dear Editor,

 

The basic purpose of government is to provide services to its citizens--services such as law enforcement, fire protection, and safe roadways.  We, the citizens hand over a portion of our income, a percentage of the value of our property, and percentage of our purchases to our government so these services can be provided for the common good.  Our responsibility as citizens does not end there.  We must constantly be vigilant to ensure that our tax money is used efficiently, effectively, and for the intended purpose. 

Our tax dollars are the primary source of revenue for government.  Tax money is the government's lifeblood.  Because of this, citizens' interests and government officials' interests will always be at odds where money is concerned.  More and more taxes coming in is in the best interest of officials because more programs and initiatives can be completed.  But more and more money coming from citizens' pockets is not in their best interest.  Yes, the new projects and initiatives may benefit the citizenry, but at a cost.  And the cost is decreased disposable income for each citizen. 

 

Back in June, 1999, a new tax was initiated to pay for the construction of our new county jail, which most would agree was necessary.  The proposal put forth to city leaders and citizens called for a 10% insurance tax that would be used only for the construction of the jail, which would be paid off in a finite time.  Fast forward to April 17, 2009.  Ten years have passed.  According to Judge-Executive Donnie Carroll, ". . . while the ordinance creating the tax does not specify using the revenue it generates for the jail, it is necessary to cover the jail's bond retirement and day-to-day operations."  So as agreed, we are applying the tax proceeds to the construction cost, but wait a minute.  What was that about the ordinance not specifying the tax be used only for the jail?  And the part about day-to-day operations?  This statement appears to be opening up the issue to use the tax proceeds for far more than the jail construction, uses such as unending jail operating expenses and non-jail related items.  But wasn't the tax supposed to disappear once the jail was paid off?

 

Next, let's examine the figures given in the article:   total jail revenues for 2008 were $5.1 million, with $3.5 million coming from fees received from housing state prisoners, $920,000 coming from the insurance tax being applied to the jail bond issue, and another $679,000 from the insurance tax used to house prisoners who were not convicted felons and had not reached state prisoner status.  So, of the $2.2 million generated from the insurance tax in 2008, $1.6 million was used for the jail, but only $920,000 was used to pay for the construction costs.  The ongoing operations costs ate up another $679,000.  And that left another $600,000 that didn't go to the jail at all.  Plus, the figures in the article deal primarily with revenues.  We know how much the debt service is and how much it costs to house prisoners who weren't convicted felons and those who hadn't reached state prisoner status, but of the $3.5 million received for housing state prisoners, what are the costs associated with this?  Are we making a profit on this service?  I would assume so, or our jail would not be providing this service. 

 

Most folks have heard the general saying that once a tax is enacted, it never goes away.  But why accept this?  This tax was implemented for a specific purpose--to pay for jail construction.  If the insurance tax proceeds remained at $2.2 million per year, the county could retire the remaining $10.4 million debt in half of the projected 10-year time.  Of course, government officials will counter with the argument that the county can no longer survive without the revenues from this tax--even after the jail construction is paid off.  It's their job to find new uses and projects for the money.  And what is our job?  Once again, our job is "to be vigilant to ensure that our tax money is used efficiently, effectively, and for the intended purpose."  If that is not the case, then Hopkins County citizens and businesses would certainly welcome that 10% tax back into our pocketbooks and cash drawers.  

 

Laura Latham

Dawson Springs

797 0091 

 

Editor's Note: ISurf has not verified the data in this response; nor, does ISurf make any assertion of the validity of the information in the Madisonville Messenger article.

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