No escape from taxes

Published:

It’s noteworthy that City Hall learned it was being short-changed on payroll tax collections only when a group of state employees noticed the tax wasn’t being deducted from their paychecks and reported the oversight to city officials.

You might think those public workers deserve some sort of gold star for honesty, maybe even one of those special rewards state government hands out for money-saving suggestions or otherwise meritorious service. No such luck. Instead, they’ll have the missed taxes withheld from their checks for 12 pay periods starting Oct. 15 – a time in which their regular city taxes are already scheduled to rise because of a Jan. 1 increase in the occupational tax rate from 1.75 percent to 1.95 percent. The City Commission says it needs the money to balance the budget.

City government got a $121,500 reimbursement from the state for the taxes not withheld because of human error. County government received $13,246. The mixup affected 420 of the 10,000 state employees who work in the city and county.

The mistake was easy for local government to overlook because the economic downturn and the resulting stagnation in state pay had already depressed occupational tax revenue. City Finance Director Steve Dawson told The State Journal’s Ryan Quinn the income from state workers had dropped $800,000 over the past few years and it was reasonable to conclude this reduction resulted from the general sluggishness.

Everybody makes mistakes, but if you’re thinking government ought to absorb the cost of its own errors, forget it. Budgets are tight and neither the state, city nor county is about to give up money they need to meet payroll and contribute to underfunded public pension programs.

It’s not the first time this sort of thing has occurred, and likely won’t be the last. Five years ago, city government discovered that 431 of its sewer customers had received free service for two years because the Frankfort Plant Board, which sends out the bills for the city, had failed to include them.

When the City Commission decided those users would have to pay the skipped bills along with future amounts due, one ratepayer recalled that a business he previously managed always “ate” any computer errors that resulted in monetary benefits to its customers. Doing otherwise, he said, is “a very poor way to run a business.” Undeterred, the commission ordered the overlooked sewer users to pay up within 30 months.

Our best advice, if it appears government is giving you an exceptionally good deal, is to assume somebody made a mistake and advise the pertinent public officials as quickly as possible. You may not get so much as polite “thank you” but at least you’ll lower the risk of having to pay more later.

Public service is not exempt from the old saw about “no free lunch.” Even though the public sector may hand out freebies in certain circumstances, somebody – a lot of somebodies, really – has to pick up the tab. Anyone’s free ride invariably ends with someone else buying the ticket.

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  • Suckem dry Steve !