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Oldham County residents will pay a 10 percent tax on their insurance premiums next fiscal year, but due to votes Monday night, all of that tax revenue will go to a taxpayer’s city instead of the county for residents in La Grange and Pewee Valley.La Grange and Pewee Valley officials said they decided to bump up their rates in response to the Oldham County Fiscal Court’s increase to 10 percent. The effort keeps city tax revenue from slipping into the county’s budget. Members of the La Grange and Pewee Valley city councils voted Monday night to also raise their insurance premium taxes to 10 percent. La Grange residents previously paid a 6 percent tax, and Pewee Valley residents paid 5 percent. The increase won’t change the amount taxpayers are billed, but will ensure that there isn’t a discrepancy between the county’s 10 percent rate and cities’ 5 and 6 percent rates. Without the cities’ increases, the county would collect the discrepant 4 to 5 percent from the tax, said Shawn Boyle, Oldham County’s chief financial officer.Boyle said he anticipated cities would raise their insurance premium tax after members of fiscal court approved the county’s increase in November. The $2 million projected revenue from the tax increase was calculated assuming the cities would follow the county in raising the tax, Boyle said.“They are using us as an excuse to raise taxes.”But Pewee Valley council members expressed the opposite sentiment Monday night. They said they had no choice in the decision to increase the tax rate.Council member Dana Barrette said the city will lose about one third of revenue from the insurance premium tax next fiscal year because the county has worked with the insurance companies to correct a common mistake — many households with Pewee Valley addresses but not in city limits were paying their insurance tax to the city. Next fiscal year they will pay to the county.Barrette said city officials needed to raise their own tax to make up for that lost revenue, especially since residents would be paying the same amount of tax regardless of city action, just half of that tax would go to the county.In explaining his vote, council member Stan Fitch said, “I’m not in favor of raising the taxes, but if the money is going to the county...”La Grange’s vote passed unanimously. Dick Filippini was the lone dissenter on Pewee’s council. He said the county should be working to decrease costs instead of raise taxes.The increase is effective July 1.
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