Just moments after voting to recall the Ad Valorem Tax rate, which formerly had a purpose of funding a new jail, the county approved the first reading of Ordinance 19-23 for an Insurance Premium Tax to impose a license fee or tax on each insurance company for the "privilege of engaging in the business of insurance within Madison County."
A 5% fee will be taxed on the premiums actually collected within each calendar quarter by reason of the issuance of such policies on risks located within the county, the ordinance reads.
"The license fee or tax shall apply only to those classes of businesses which such insurance company is authorized to transact, less all premiums returned to policyholders," the ordinance outlines. A lengthy section follows that statement defining those exempt, including worker's compensation insurance, annuities and federal flood insurance to name a few.
According to Magistrate John Tudor, both Richmond and Berea are already imposing the insurance tax rates, at 8% and 6% respectively, and that Madison County is one of very few counties that is not already charging the tax.
He urged this proposed insurance tax would not go to fund a new jail, nor would it go to a finance a rehabilitation center.
"This is simply going to go to trying to survive," Tudor said. "Trying to pay for inmates in other counties that we are housing, trying to continue some of the services that we are providing. … This is, I feel like, a needed tax to continue the services that we are providing."
Glenna Baker, the county treasurer, followed Tudor affirming it was strictly to help keep paying the bills.
Prior to discussion of the insurance tax ordinance, she gave the fiscal court the treasurer's report, stating that the fiscal court had signed its first $300,000 transfer from the investments fund into the general fund to be able to keep up with financial responsibilities of the jail.
With a little more than $1.6 million available in investments, Baker noted the fiscal court will have depleted its investment fund by this time next year and would then be going bankrupt.
"That is just the plain fact of it. This is to pay the bills," she said.
She credited contracted inmate housing or housing inmates in other counties as the number one reason for the increase in expense costs, along with "normal everyday wear and tear expenses."
"We are facing a $1.6 million dollar increase (to overall expenses) just on housing inmates," Baker said. "We are paying out $169,000 in bills to the jail, just this two week court."
"We are just trying to pay the bills," Magistrate Roger Barger echoed. "… This has gotten ridiculous, we are just trying to pay the bills and keep the services that we have got still going."
As a comparison, according to Baker, out of the top 15 counties comparable to the size of Madison (excluding Fayette and Jefferson), Madison ranks the lowest in terms of generated revenue.
"So how we do offer the services that we do offer and have offered for the last years not raising taxes for the last 50 years? We are running out of time," Baker said.
The first reading was approved four to one with Magistrate Larry Combs voting no.
The second reading of Ordinance 19-23 will take place at the next Madison County Fiscal Court meeting on Dec. 17, 9:30 a.m., located at the courthouse, 101 W. Main St., Richmond. A public comment portion will be held before the vote.
Reach Taylor Six at 624-6623 or follow her on Twitter @TaylorSixRR.