Daviess County Fiscal Court approved an ordinance Thursday to lower the tax rate on insurance premiums from 8.9% to 7.2% for property outside Owensboro and Whitesville city limits, effective July 1. They will drop the rate to 4.9% next July.
County Treasurer Jim Hendrix said the ordinance would amend a prior ordinance that “only deals with the 4% piece that we charged to finance the Convention Center.”
In 1973, Fiscal Court created a 4.9% tax on insurance premiums to help fund the county fire services.
In 2010, the court raised the rate to 8.9% to pay off the $20 million they borrowed to help pay their portion of the cost for the Owensboro Convention Center — a move made with the agreement that the tax rate would revert to 4.9% once the debt was paid off.
Fiscal Court members expected the $20 million debt to be paid off in 2030.
However, after refinancing and paying an additional $500,000 toward the principal in 2014, they cut six years out of the term. Last month, Hendrix said they have still been overcollecting by nearly $100,000 per year, meaning they can shorten the term even further as well as lower the rate.
With the rate lowered, Hendrix said Fiscal Court would still be able to terminate the insurance premium license fee by 2022 without grossly over-collecting.
“So a year from now, I anticipate coming back with a filing that would take that piece to zero,” he said.