HOPKINSVILLE, KY (CHRISTIAN COUNTY NOW) – The Hopkinsville City Council discussed a positive trend in revenue as April saw the most incoming payroll tax in the past two years. In response to lower revenue, the city’s chief financial officer explained that growth and construction projects have caused fluctuations in this revenue source over the years.
“April was a good month for us,” said City of Hopkinsville CFO Melissa Clayton during her monthly financial report to the city council on May 18. During the past few reports from Clayton, she has reported lower than average revenue for the city through a decline in payroll taxes, business license fees and other sources.
In regard to collection of payroll tax, the city budgeted to receive $19.3 million in revenue in the fiscal year ending in June of 2025. As of April, the city has only collected $18.6 million. Comparatively, this time last year the city had already collected $19 million in payroll tax.
Despite this number being than budgeted, Clayton explained it still indicates a positive trend. In April, the city collected around $2.1 million in payroll tax, which is the highest number the city has seen for this revenue source in the last two years.
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History of growth in payroll tax revenue
“It brought me some great hope that we are getting out of where we have been,” said Clayton. Compared to April last year, the city is up $140,728, but overall payroll tax collection is down by $364,592. She added that if May and June follow this same trend, then the city will end the fiscal year even with last year.
A chart Clayton presented reflects growth that has occurred in the city since 2014, with a noticeable decline in 2019-20 during the COVID-19 pandemic.
She explained that the 1.98% decline this fiscal year seems like a natural response to the previous three years of unprecedented growth, “That’s economics in general. You can’t keep going up, up, up without at some point having a downward turn.”
A spike in payroll tax growth that was initiated a few years ago is attributed to regular growth with new businesses and job positions opening up throughout the city, while also inflated by large construction projects that brought temporary positions.
Clayton reported that revenue from businesses licenses also increased in April and the city is still operating at positive revenue over expenses overall.
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