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After a narrow vote, the La Grange City Council has approved an ordinance that modifies the city’s current business licensing tax.
The ordinance, which passed 5-4 Monday with Mayor Bill Lammlein casting the deciding “yes” vote, adds language to the existing law on the city’s business licensing. The new approved language requires attorneys to submit for a business license tax at the end of each year, but doesn’t allow stop work orders if the fee is not paid. Attorneys also don’t have to display their business license, according to the new language.
Critics of the ordinance say the changes unfairly single out lawyers when it comes to the city’s business tax and the new language is unconstitutional and a precondition to practicing law, which local legislative bodies cannot do.
“The Kentucky Bar Association says this ordinance appears unconstitutional,” councilman Jason Taylor, a lawyer himself, said during the meeting. “It would affect anyone from anywhere in the commonwealth who came to Oldham County on a case. I think we’re opening ourselves up to litigation and I think that is a very bad problem.
But supporters say the changes actually strengthen the current law, and attorneys should have been tallying up their income they made while doing business in La Grange for decades to pay a business tax.
“This is not a precondition, it’s something you have to do after you practice law at the end of the year,” city attorney Steve Emery said. “There’s no stop work order, like on other businesses, because only the bar association governs that. This amendment does the opposite of singling out attorneys. It carves things out for them.”
Critics of the proposal wondered how the city could enforce the new language, including how it would apply to local judges who split time in Oldham and other counties.
And one La Grange attorney, Jason Dattilo, said the proposal infuriated him and seemed isolationist of the city council.
“It’s unreasonable, ridiculous and disgusting,” Datillo said during public comment on the ordinance. “There’s got to be a more logical and enforceable way to raise revenue.”
But supporters of the ordinance pushed back on claims it was unconstitional or a new tax on attorneys.
“What we are doing tonight is not generating a new tax,” Emery said. “I don’t understand the allegation that this is vague. I don’t understand how this regulates how to practice law… Even if you reject this ordinance, (attorneys) still have to pay the tax.”
How much a business pays for a business license is based on a percentage of their income made in the city limits, not elsewhere in the county or the state. The minimum fee for a business license is $55.
A motion by Taylor to table the ordinance until a future meeting to hear from either the KBA or Kentucky Attorney General on the constitutionality of the ordinance split the council, but a tie-breaking “no” vote by Lammlein killed the motion.
The council then voted on the same lines, 5-4, to approve the new ordinance.
Earlier, the council also approved a penalty system for those who don’t pay the business tax. Under that ordinance, a first offense is a $50 fine within 30 days, and $50 more after that. A second offense is $100 within 30 days and additional $100 after that and a third offense is a $500 fine if paid within 30 days and another $500 after that.
All three levels also include a one percent interest rate per month.
After the vote, Taylor said he would continue to get others involved on the ordinance, even though the council already passed it.
“All I wanted to do was table this until we got an outside opinion and they refused to do that,” Taylor said. “Because Mayor Lammlein didn’t want it that way, four others went with him. The council didn’t use to be like that. Some of the things that have happened are not the direction the city needs to go in. Lammlein hasn’t seen a tax he doesn’t like and that’s not the leadership we need.”
But Lammlein said the vote didn’t have anything to do with Taylor and he has little concerns about the law being struck down.
“Anytime you pass an ordinance you have some concern, that’s the nature of the game,” Lammlein said. “But I don’t have concerns about this modifying ordinance. I think any concerns were addressed. And this was not a threat against Jason Taylor, no matter what he thinks.”
Lammlein said he asked Emery to investigate the law to see if it could be improved months before any fights with Taylor surfaced. Emery agreed that the new ordinance wasn’t an attack on Taylor, whose law firm does work in the county courts, located in La Grange.
“I was pretty surprised when I heard that,” Emery said.
City moves forward on new station
After a 20-minute executive session, the council also approved demolition work to begin at the old firehouse, where a new police station will be located.
Lammlein said the city has to get a building permit before starting interior demolition work, then renovations. He expected all work to be completed by June. Once the police department moves, the city will put the current station building up for sale.
The council also approved that the mayor enter into a letter of intent with Key Homes on land where the city’s skate park currently sits. Lammlein said he couldn’t comment further on what the letter entails, but did rule out a splash park, which the mayor previously said he wants the city to have before he leaves office this year.
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