COVINGTON — About one-eighth of the estimated 80,000 refund checks from a contested payroll tax increase have been mailed to Kenton County workers.

        But if you haven't received your check yet, don't despair. Kenton County Treasurer Ivan Frye hopes to have all refunds mailed by June 1.

        Anyone who earned wages in Kenton County last year will qualify for refunds from a contested payroll tax increase repealed by Kenton Fiscal Court. Last month, refund checks ranging from $1 to $445.20 began appearing in mailboxes of people who had worked in Kenton County in 2001 and had county payroll tax withheld.

        In December, Kenton County Judge-executive Dick Murgatroyd recommended — and county officials agreed — to refund the money while appealing a court decision against Kenton County in a lawsuit challenging the payroll tax hike that took effect on Jan. 1, 2001. Democrats accused the all-Republican fiscal court of acting under pressure with the election less than a year away, a claim that members of Kenton Fiscal Court denied.

        “We've mailed 12,000 (refund) checks and have 68,000 to go,” Mr. Frye said Friday. He added checks are being date-stamped and processed in the order in which W-2s are received from employers.

        Mr. Frye estimates the county will process 80,000 refunds, nearly six times the number of checks his office normally writes in a year.

        Kenton County's treasurer said that four employees — including two who are working on the refunds full time — are helping get the checks out. That number includes a temporary worker who was hired Monday to do nothing but handle refund checks.

        To help speed the process, workers in the county treasurer's office are asking employers to submit the information on employees' W-2s on diskette if possible. For information on how to do that, employers can call (859) 491-3331.

        Since he began issuing the refunds last month, Mr. Frye said, his office has received dozens of calls from people who want to know the status of their refund.

        Still others are confused and mistakenly think they are owed refunds simply because they live in Kenton County or had interest income.

        “(The tax) is strictly on wages, not interest income,” Mr. Frye said.

        The county treasurer and his staff are asking workers to be patient and avoid calling county offices with questions about the status of their checks, as the county has no master list of individual employees. The county is processing refunds as it receives information from companies on Kenton County payroll tax withheld from individual workers' checks.

        “We are running real fast and hope to get the refunds out as quickly as we can,” Mr. Frye said.

        The county is paying about $27,000 in postage for the refunds, and has yet to calculate the cost of the checks, envelopes and labor involved in issuing the refunds.

        Interest paid on the refunds is 1 percent, or the equivalent of annualized interest of 4 percent for the period of time the county actually held the money that's being refunded, Mr. Frye said. In many cases, he said, the county did not receive the additional revenues from the payroll tax hike until the last quarter.

        The city of Covington and others challenged the payroll tax hike that took effect on Jan. 1, 2001, saying they thought it was illegal and would hurt countywide economic development efforts.

        Revenues from the increase were to offset general funds the county planned to use to build a new jail. Authorities say a new jail is desperately needed, but it has generated much debate.

        Payroll taxes also are assessed on Kenton County businesses' net profit. Under the new plan, the most any business will pay for the year is $318.75.

        Because the fiscal year for many businesses did not end until after the payroll tax hike was repealed, county officials told businesses to pay the adjusted amount. Businesses that had pre-paid the tax will, like individual workers, receive refunds and interest.

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