As Paducah Finance Director Jon Perkins puts it, the city is trying to solve a mystery when it projects the tax revenue. Clearly, government should not operate this way. It's a mystery because no one is in charge of auditing the insurance companies or enforcing the tax. The city doesn't have the direct authority to look at the companies' books or question them about the tax payments. In terms of insurance tax collections, city officials must wait and hope for the best.
City officials can petition the state insurance commission to do an audit of the tax.
Apparently, however, the state doesn't have the funding to conduct audits. Paducah and several other cities are considering pooling funds to pay for an audit. This isn't an efficient or effective way to conduct the people's business. Cities depend on the insurance tax revenues, and they need the authority to monitor and enforce the tax. The legislature needs to end the confusion and amend the law so that cities can protect the interests of their taxpayers.