LA GRANGE, Ky. (WDRB) -- By a 6 to 1 vote, the La Grange City Council on Monday night approved a controversial "compensation tax" for those who work within city limits.

Supporters argue the new tax, also described as an occupational tax, will become a new source of revenue for the financially-strapped city.

The tax is one percent of wages.  It takes effect October 1. 

City leaders admit it has not paid down the debt service on an $8 million bond for an under-used business park called Oldham Reserve.  The city's financial adviser said after a dramatic credit rating downgrade in May that the city will have to pay upwards of $700,000 a year on the bond. This tax is expected to help pay a large portion of that, though no one from the city could say exactly how much Monday night.

Monday's city council meeting was, at times, heated.  Oldham County residents spoke mostly in opposition to the tax.

Debby Neal-Pate, whose husband owns a law firm in La Grange, said, "These people want to come here and earn money and earn a living.  And now you want to take their money.  It's wrong. It's absolutely wrong."

Mayor Bill Lammlein had one man removed from the meeting at one point, after the way that man disagreed with how the mayor was running the meeting.

"If you're going to run things like this, you need a swastika," the man said.

It was enough that Lammlein ordered the man removed. The police chief escorted the man out of building.

Lammlein argued the one percent tax on workers is needed to help the city dig out of its financial "hole."

Only two citizens spoke in favor of the tax.

Before voting, council members told the audience their hands "were tied."

Council member Jean Knight said, "I can guarantee you we don't want to do it.  But we have to," referring to implementation of the tax.

Sara Puckett, a Crestwood resident, said the tax would cut into the gas money she and her husband spend to drive to work at the La Grange McDonald's restaurant.

"I think it's unfair and not needed," Puckett said.

Other residents urged the city council to sell Oldham Reserve, but a member of the Oldham County Chamber of Commerce explained there have been no potential buyers, and that the city and the county entered the deal together.  Oldham Reserve has just one tenant.

The measure includes a sunset clause that if enough revenue is generated, the tax will expire.

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