One of the biggest supporters of a cut to the county’s insurance premium tax is Silver Creek Transportation owner Jason Cowan.
Silver Creek has a fleet of 75 road tractors and 210 trailers and all need to be insured, which according to Cowan is one of the company’s biggest liabilities. With Henderson County’s current 9.75% insurance premium tax, Silver Creek paid around $107,000 in the most recent fiscal year, Cowan said.
When Cowan saw that the Henderson County Fiscal Court will cut the tax in half—which will bring down Silver Creek’s tax bill to $50,000-plus—he reached out to the Hendersonian.
“That’s a big deal for us,” he said.
The fiscal court will soon hear a first reading to set the county’s insurance premium tax at 4.875%, half of its current 9.75%. Judge-Executive Brad Schneider says the cut will save in total county residents some $2 million.
The fiscal court on Tuesday unanimously approved a Magistrate Tim Southard motion to prepare an ordinance for the tax cut.
Schneider said the insurance premium tax brings in roughly $4 million each year.
Schneider said he—and Southard—have wanted to cut this tax for a while. Southard said when he was first campaigning for his spot, he ran on that change. But when he saw the numbers after he got into office, he said it wouldn’t have been wise to cut the tax then.
A couple key points stand out as reasons that this tax can be cut now. For one, the county’s general reserve fund at the end of the fiscal year stood at $42 million, Schneider said.
Second, with the opening of the Henderson County Mine last spring, the county will again receive coal severance funds. Schneider said that figure for the coming year is trending to more than $1 million. He also said that the mine is not at full capacity yet, indicating that the figure could increase in coming years.
Schneider said officials looked at cutting the other two taxes that are the county’s main revenue streams—property taxes and occupational license fees. But the insurance premium tax was chosen because it could have the most impact, said Schneider.
Not every county resident owns real estate, nor does every resident who live in the county work in the county. But almost all hold insurance on something, Schneider said.
The insurance premium tax is listed on a person’s insurance premium and is paid to the insurance company which then quarterly sends insurance revenue to local governments, Schneider said.
A point Schneider stressed is that the fiscal court’s insurance premium tax cut does not affect insurance premium tax rates in Robards, Corydon or the city of Henderson.
Cowan, with a chuckle, said he’s been on Schneider’s case for years to make a cut to the insurance premium tax.
Schneider foresees the cut will greatly benefit farmers, who hold insurance on pieces of equipment that together are valued in the millions of dollars. He also said big county companies that have lots of equipment will benefit.
Paying half of what Silver Creek did will allow the business to invest back in its 100 employees, Cowan said. The company located on South Green Street plans to increase employees’ 401K share and increase bonus plans, Cowan said.
“My plan is to put it all back into our team members,” Cowan said.