Well, the news is out. Mayor Dan Kemp gave his budget address this morning, recommending higher taxes and overall budget cutting for the entire city.

Here are his main points:

Taxes:

• Payroll taxes would be increased from 1.5 percent to 2 percent beginning Oct. 1. That means someone with an income of $30,000 would have to pay $150 more per year - $600 total up from $450.
• Business and manufacturing license taxes would change to a flat 1.5 percent rate with a $10,000 maximum tax cap beginning Jan. 1, 2008.
• Those with less than $25,000 in gross receipts would no longer have to purchase a business license.
• The minimum license fee for those with more than $25,000 in gross receipts would increase from $50 to $250.
• Insurance premium taxes would increase from 5 percent to 7.5 percent, beginning July 1, 2008. The deadline has already passed to increase this sooner.
• Standard 4 percent revenue increase in property taxes.

Cuts:

• The current city hiring freeze would remain in effect when people retire or leave, except by order of the mayor.
• Departments will receive a budget that is 5 percent less than last year's.
• So will optional agencies, except in cases where there are contractual obligations.
• Deferral of new pumper truck for the fire department and a new 3/4 ton pickup truck for the public works department until 2008-09 fiscal year.

Additional expenses:

• 2.56 percent cost-of-living pay raise for city employees. Employees did not receive a cost-of-living raise last year.

The cuts total about $547,000 and the additional revenue should bring in around $2.65 million next fiscal year - that number should increase the following year when the payroll and business and manufacturing license tax increases include a full 12 months and the insurance premium tax is enacted.

The mayor's budget must go before the city council before any of the changes are certain. The council will address the proposal at next Thursday's Committee of the Whole meeting at 6 p.m. at the city municipal building. A budget ordinance and tax change ordinances would probably go before city council at the first city council meeting in June.

For more details, check out the actual documents on the links page: http://www.kentuckynewera.com/2007Budget/index.html

So, there you have it. What do you think?

How might the changes affect your personal situation?