13-05-2025
Somerset proposes increase to Occupational Tax rate
City Council
Pictured are Somerset City Clerk Nick Bradley, left, Mayor Alan Keck, center, and City Attorney John Adams, right.
Should Somerset City Council approve, the city's Occupational Tax rate will be going up.
The council held the first reading Monday on an ordinance that would see the Occupational Tax go up in increments to 1.2%.
The current rate is 0.6%.
Mayor Alan Keck's proposal is to have the rate go up 0.9% on July 1, then up to 1.2% on January 1, 2026.
That means anyone who is employed at a business located within the city limits will see the Occupational Tax rate increase.
Keck said the January 1 date is also when the state Income Tax rate is set to be lowered from 4% to 3.5%, meaning that the impact of the Occupational Tax raise should be minimal.
The reason for the Occupational Tax increase is that, as was stated in the ordinance itself, 'historical inflation has caused the need for the city to increase revenue to ensure future budgets that are beneficial to the city and preserve the level of public services produced by the city.'
When discussing the city's budget for the 2025-2026 fiscal year, Keck noted that the proposed budget is around $8 million lower than that of the current fiscal year.
'Some of that is a reduction in major infrastructure projects, but I think it shows another signal that when we can, we're going to cut and we're going to get lean in certain departments,' Keck said.
The issue is that, with cost of living increases for City employees, along with a 12% increase in health insurance and more increases in workers compensation rates, the city's 'cost of doing business is just increasing,' Keck said.
He told the council, 'In the last six years, due to wage inflation – and some of that I'm proud of because we're taking care of our employees in a better way, some of that perhaps is regrettable because of inflation nationally – our payroll is up over $6.4 million. And when I say payroll, that includes benefits and retirement. That's a huge number. But that number is with fewer total people, and with more first responders. We are quite literally accomplishing more with fewer people.
'...The reality is, that $6.4 million-and-growing has to come from somewhere.'
Keck then said that the reason he chose increasing Occupational Tax over Property Tax was that he felt collecting more taxes on property unfairly hit elderly property owners and those on a fixed income.
He also read a list of cities that Somerset 'competes with' and their current Occupational Tax rates. Cities like Richmond, Ashland, Bowling Green and Berea all have a 2% tax, and Danville's is 1.9%.
In addition to the Occupational Tax increase, the ordinance would raise the Net Profits License Fee of all Somerset-based businesses from 0.6% to 1.2%.
A second reading and vote will take place at the council's next meeting, which is scheduled for Thursday, May 29. The meeting was moved from its regular Monday schedule due to Monday being Memorial Day.
As part of this week's meeting, council held the first reading of the city's proposed budget for the upcoming fiscal year.
Revenues and expenditures for the 2025-2026 budget are:
–General Fund: $33,090,900
–Sanitation: $8,323,200
–Water: $15,126,300
–Gas: $13,472,700
–Wastewater: $16,655,900
–Waterpark: $3,095,000
–Fuel Center: $1,169,850
–Tourism: $383,450
–EMS: $10,372,400
–The Virginia: $961,700
– MAP Funds: $295,642
–Horse Soldier Tax Incremental Financial (TIF) District: $21,050
Total: $102,968,092
Like the tax ordinance, a second reading and vote is set for the next council meeting.
Keck and firefighters
Mayor Alan Keck, left, swears in new firefighters for the Somerset Fire Department. Those firefighters were, from left: Brett England, Joey Vaughn, Byron Gregory, Morgan Quick, and Tucker Robinson.
Also at Monday's meeting:
– Alan Keck conducted the swearing in of five incoming firefighters: Brett England, Joey Vaughn, Byron Gregory, Morgan Quick, and Tucker Robinson.
– Jody McRoberts with Pulaski County Strong Towns informed the public that the next Strong Towns meeting will be held this Thursday in the City Council Chambers at the Energy Center. The public is invited to attend, and it will feature special guest speaker Michael Huston, who is an urban planner from Lexington.
Roberts said that Huston will be leading attendees on a walk around downtown Somerset and giving his insights on what he sees in terms of city planning.
A light lunch will be served at 11:45 a.m., with the meeting beginning at noon.
– Council approved the dedication of streets within the SPEDA Commerce Park into the city street department. Those roads are Innovation Avenue, United Drive and Progress Lane.
– Council also voted to approve a zone change for property located at 100 Mardis Street from an Industrial-2 zone to a Residential-3 (multi-family units).
