City of Bowling Green to increase Occupational Tax rate starting Jan. 1

BOWLING GREEN, Ky. (WBKO) - Starting on Jan. 1, 2024, taxpayers in Bowling Green will be seeing a slight increase in their occupational tax rates, from 1.85% to 2%.

“We have always tried to live within our means, give back to the public, and invest in infrastructure capital, in Bowling Green,” said City Manager, Jeff Meisel, “but we’ve just come to the realization, this last year or two, with inflation, with our growth, we just felt like it was time that we probably needed to get back and reset, recapture the tax rate.”

The occupational tax is for anyone who works or has a business inside the city limits. It is based on the occupation or profession that a person might have.

Meizel said with the state’s General Assembly’s action of reducing the overall state income tax, the city felt now would be a good time to make the increase.

Meizel also added that the tax is the city’s main source of revenue.

“Occupational tax is 70% of our revenue,” he said. “It’s our only vehicle to produce significant revenue to run a city and that’s why all cities in Kentucky live and die with the withholding tax and the occupational tax.”

The money collected from the tax is then used to help fund several different areas of the city. In addition, Meziel said the increase will help generate around $5 million once a full fiscal year of the new rate has been reached.

“So not a huge amount of money, but we think it’ll be enough to help us pay the bills and keep growing, keep progressing,” he said.

Meziel added that the money generated from the increase will be distributed equally across the board to help cover basic services for the city.

“We have a growing population,” Meziel said. “We think we’ll probably hit 90,000 people by 2030. We were at 72,300, something in the 2020 census.”

One way to think about where the money is going would be to take a hypothetical whole dollar and divide it up, 49 cents of that dollar would go to the police and fire departments.

“Public safety is number one,” Meisel said. “If you don’t have a good safe community, you don’t have a community. We must be doing something right here in Bowling Green-Warren County, or we wouldn’t have had the 25% growth from 2010 to 2020 and we think we’re going to have another repeat of that from 2020 to 2030, so we’re just trying to prepare for that.”

The other parts of the money from the tax go to Public Works, Parks and Recreation, general government funds, and Neighborhood and Community Services.

“It costs a lot of money to run a city of our size,” Meizel said. “Another challenge we have is we’re 42 square miles geographically, so we’re pretty spread out for a town our size and growing.”

This will be the first time since 2007 that the city has raised the rate. However, it isn’t the first city in the state to have or raise its occupational tax rate to 2%, Lexington is already at 2%.

For more information on the tax and how it will affect you, visit bgky.org/finance.

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