Walton workers will begin paying a new 2% payroll tax at the start of next year to help raise money for its nearly at-capacity sewer system.
At its meeting Tuesday evening, city council voted 5-1 to move forward working with Boone County to begin collecting a 2% occupational tax on all Walton workers. Councilman Matt Brown voted against the motion.
The move followed an update from councilwoman Sherri Gaskill, who shared details from a meeting that she and city attorney Michael Duncan had with the county regarding tax collection. According to Gaskill, employers at Walton businesses will begin collecting a 2% occupational tax from its employees beginning Jan. 1, 2026, which Boone County will collect quarterly on behalf of the city.
Walton will pay Boone County $70,000 to set up onboarding for the tax collection, according to Gaskill.
“That is a lot of money, but there’s a lot that goes into it,” said Gaskill. “They’re going to take care of everything, the payroll companies, the businesses, the government employees, the tax forms. They’re going to do the legal forms, the agreements, my goodness, there’s so much.”
Following the initial onboarding fee, the county will also enforce a 10% collection fee on the taxes it collects. Of the $2.8 million that Walton hopes to collect to pay for sewer system improvements, this means that the county would collect $280,000.
While Mayor Terri Courtney acknowledged the sizeable fee, she said the city is considering the cost and comparing it to the burden of Walton collecting the tax itself.
“[The city of] Union collects their own [occupational tax] and what they learned was that they probably wouldn’t do that again, had they been given the choice. They said that it’s the equivalent of a full-time employee to manage all of this, but when we’re talking about 10% of $2.8 million, it may be worth a full-time employee,” she said. “This is new to us and we’re going to have to learn about it and learn from the county and see what our options are moving forward.”
The decision to start raising funds via a payroll tax went into motion late last year, when city council began brainstorming ways to raise money for much-needed improvements to its water and sewer system.
Currently, Walton’s sewer system operates at nearly 80% capacity and has been under a moratorium as a result. This means that no new homes or businesses can be connected to the system, stunting further growth and development in the city.
City council also approved resolutions at its Tuesday meeting authorizing a lease agreement for the financing of the sewer improvement project through the Kentucky League of Cities.
“We have met with our engineers, as well as the Kentucky League of Cities, who would be helping us with the bond issuance for our sewer upgrade. We’re excited because it’s been a long time coming,” said Courtney.
According to Courtney, the high estimate for the cost of both water and sewer upgrades would be about $10.1 million, and the project would take about three years to complete.
Following months of discussion of the occupational tax, in which local residents and business owners alike have gathered at recent council meetings to share their thoughts, questions and concerns, Courtney and councilman Caleb Flege have spearheaded the formation of a Small Business Coalition, which held its first meeting last month.
According to Courtney, the coalition invited local nonprofits, church leaders and business owners, among others, to discuss new opportunities for businesses and the community. Following its first meeting, Courtney said that community newsletters will start being shared in monthly water bills to residents starting at the end of the month. Further, Walton-Verona Independent Schools Superintendent Matt Baker held discussions with city officials regarding co-op opportunities for students in hopes of forming a connection between local businesses and schools.
“There’s a lot of students at our school that would like an opportunity to co-op and they don’t know that these opportunities exist, so I’m excited about that,” said Courtney.
The next Small Business Coalition meeting will take place on Mar. 21, and any local community or business leaders are welcome to attend.