Hickman increases payroll tax, business owner considers possible effects
City leaders in Hickman, Kentucky, voted to increase the payroll tax by 0.5 percent to 2 percent.
Hickman’s city manager says the new rate is similar to surrounding cities. Fulton, Paducah, and Mayfield all have 2 percent payroll taxes. Clinton’s payroll tax is at 0.05 percent. Murray doesn’t have a payroll tax.
Hickman’s higher tax begins on July 1 and will go to the city’s general fund. City leaders say this is what they need to make the town viable in the long run, but critics say the tax increase could hurt the city in other ways.
Nettie Sue “Memaw” Jones’ name is associated with country cooking and cornbread in Hickman. She says her restaurant stays pretty busy, but she believes working people like her customers keep the city running. She says she’s worried when her customers have a smaller take-home from their paychecks, her lunch crowds will be smaller.
But Memaw says she knows she can rely on her regulars, and “We’ll survive. We’ve survived a lot more.”
The average person who makes $400 per week paid $6 a week on the previous payroll tax rate. With the increase, that person will pay $8 per week, which will increase the general fund $80,000 to $90,000 per year.
City Manager Johnny McTurner says he doesn’t believe the increase over-taxes the town, but instead will help improve city infrastructure. He says it’ll help the city in the long run, considering the failing water and sewer lines around town. McTurner says it’s important to keep money in the general fund as opposed to drawing money out.
McTurner says he knows the working class carries the payroll tax burden, but it’s the only option when the water system needs an update.
The payroll tax applies to anyone working in the city, including commuters and contractors. Hickman will also do away with the city sticker, but having it will still be required until May, 2016.
The city’s general fund also funds its police, fire, sewer, and gas.