Trimble collects $96K with new insurance tax
Tuesday, December 24, 2013 10:00 AM
Trimble County collected about $96,000 during the first quarter after a new tax was approved earlier this year to help with a deficit in the county's budget.
Judge-Executive Jerry Powell said the county has received the first round of payments from a 5 percent insurance premium tax that was approved by the Fiscal Court in February. But county officials still aren't sure how much to expect from the tax for a full year.
"We started getting some of the money in September," Powell said. Tax money from the first quarter also continued to stream in throughout October, November and the early part of December.
Magistrates approved the insurance premium tax to help the county make up a $500,000 deficit in the budget caused by a decline in revenue at the Valley View Landfill located in the county.
Powell told residents at a January meeting that the county had absorbed the costs over the last three years and used reserve funds to pay the county's bills. The county had already cut certain areas of the budget to help with the deficit but something else needed to be done, magistrates told the public.
The tax charges a fee on any insurance policy in Trimble County covering casualty, automobile, inland marine, fire and allied perils.
Magistrates decided during the second reading of the bill not to levy a tax on county residents' health and life insurance policies.
The tax went into effect on July 1.
Even though county residents saw an increase on their bills because of the tax, residents living within the city limits of Milton and Bedford did not, Powell said.
That's because cities in Trimble County already collect insurance premium taxes above the county's 5 percent tax.
All of that tax money goes toward operating costs in Milton and Bedford. None of the city's insurance premium tax goes into the county budget.
Insurance companies collect the tax whenever payments for county residents' insurance comes due, Powell said, which makes each quarter's payment to the county vary a little. The county should have a better idea of an average collection for each quarter after second quarter payments are received.
"Each quarter is going to be different," he said.
If the current tax payments stay the same, the county could collect about $384,000 for the full year.