WILDER — The city stands to lose as much as $250,000 in payroll taxes because of pending layoffs at Newport Steel, but city officials say they intend to make budgetary changes without disrupting or reducing services.

        NS Group, the parent company of Newport Steel, announced at the end of March that it would cease steel production at the plant on the banks of the Licking River and concentrate on piping for the oil industry, resulting in the loss of 280 jobs.

Vance

        “We don't have the hard numbers from Newport Steel yet, but we're guessing the layoffs will mean a loss of $200,000 to $250,000 a year in payroll taxes,” Wilder city administrator Terry Vance said Tuesday. “Our budget is $1.9 million; $250,000 equates to one entire department in the city.”

        Payroll taxes account for 54 percent of the city's budget. At one time, Wilder relied almost entirely on Newport Steel for its financing, according to Mayor Bo Knight. But over the past 20 years, that has gradually changed as the town has grown in population and in number of commercial properties.

        “We've been preparing for this for some time,” Mr. Vance said. “The (city) administration has been expecting some cutbacks at the steel plant. Our goal now is to make the necessary changes in budget and taxing so that our citizens and visitors don't see any change in services.”

        Wilder is the fastest-growing city in Northern Kentucky, with a population that has increased from 691 in 1990 to 2,624 in 2000. It also has experienced dramatic commercial/industrial growth, something Mr. Vance said will help the city overcome the Newport Steel losses.

        “We can't just raise property taxes. That requires a vote,” he said. “What we've been looking at for some time is shifting some of the (tax) burden to the businesses.”

        City Council is looking at:

        • Changing the tax on businesses from a form of net income to a gross receipts tax, similar to what most Northern Kentucky cities now require of businesses.

        • Delaying some projects, such as road repairs or replacement of equipment like police cruisers, for a year or more.

        • Not filling some positions when employees leave.

        A gross receipts tax will help, but Mr. Vance emphasized that it's only a part of the city's planning to reduce the budget.

        “The gross receipts tax would probably be .00075, which would amount to $750 a year for every million dollars of gross receipts,” he said. “Business tax presently accounts for only about 2.5 percent of our budget.”

        Wilder has one of the lowest property tax rates of any city in Northern Kentucky, and Mr. Vance said there is no plan at present to look at an increase.

        Much of Wilder's population increase in the past 10 years has been in condominium owners rather than single-family homes.

        “We have a pretty healthy cash reserve, about $500,000,” he said. “If necessary, we can fall back on that.”

        City Council must consider and adopt an ordinance establishing a gross receipts tax by July 1, when the city goes into the new fiscal year. Mr. Vance said the city would not actually collect any of the additional revenue until the following April.

        “We're prepared to deal with this issue, and I think the city will be fine,” he said. “We have some new businesses coming in that will increase our tax base. And we can thank previous mayors and councils for doing their homework over the years so we are no longer dependent on one business.”
       

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