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Take Back Kentucky Legislative Action Alert

Oppose: HB 441: Hotel Tax Increase

3/14/2016

Call 1-800-372-7181

Sponsor(s):                 R. Palumbo, G. Brown Jr., K. Flood, S. Overly, S. Westrom

Status:                       

  • Feb 19, 2016 – introduced in House
  • Feb 22, 2016 – to Economic Development (H)`
  • Feb 23, 2016 – posted in committee
  • Feb 25, 2016 – reported favorably, 1st reading, to Calendar
  • Feb 26, 2016 – 2nd reading, to Rules
  • Mar 02, 2016 – posted for passage in the Regular Orders of the Day for Thursday, March 3, 2016; floor amendment (1) and (2) and (3) and (4-title) filed
  • Mar 03, 2016 – 3rd reading, passed 77-13 with floor amendment (2)
  • Mar 04, 2016 – received in Senate
  • Mar 07, 2016 – to Appropriations & Revenue (S)

Committee:                Senate Appropriations & Revenue Committee

Timeframe:                 Committee meets Every Tuesday at 9AM in Annex Room 149 & upon Adjournment each day.

Message is for:           All Senate Leadership, Your Senator, and Members of the Senate A & R Committee

Message:                     “Oppose HB 441. Do not raise taxes to help a private entity”

Optional:                    E-mail the legislators on the committee. Example e-mail address: Firstname.Lastname@lrc.ky.gov . If that doesn’t work they have a contact page on their informational page.

Information:   This bill will allow for an Urban County Government (Lexington is the only one in the state) if it has a non-profit entity that has a Convention Center, to raise taxes on the price of a hotel room in the city. This is actually a classic example of how P3’s would work in a non-tolling situation. This tax increase is to pay off current bonds so they can take out more bonds to do more improvements. We do not need to be raising taxes this will hurt citizens, business and tourism with the increased cost. We do not need to raise taxes for the purpose of supporting a non-profit to pay off its current bonds to take out new ones.

Here is a breakdown of the math. The convention center needs $250 Million dollars to do the improvements they want to do. The state is supposed to front $60 Million dollars. The state will be funding 24% of the endeavor. In committee when asked how much money this tax increase will bring in annually 1.6 Million per percent and 2% is supposed to go to the convention center and a half percent is supposed to go back to the state to pay off the state. With what appears to be no interest repaid back on this loan at this tax rate it will take the convention center 75 years alone to pay back the state. However, if you look at the breakdown further a half percent is 20% of the total revenue collected yet the state is putting up 24% then the state is getting paid back at a slower rate than the other sources of revenue for the conventions center. We don’t know where the remainder of the funds are coming from. This bill has been reported favorably out of committee and is on the House floor ready for a vote.

Governor Bevin has come out in support of this Debt Financing by the state that appears to be interest free to a private entity and tax increase. In fact he actually sent members of his Cabinet to testify on behalf of this bill (CLICK HERE for story). As far as we know this is the first time the Governor has sent someone from his office to push a bill. This is not a good sign of fiscal responsibility from our newly elected Governor. Call his office at 502-564-2611 and tell him to rethink his position on HB 441, it is not a winner for the taxpayers of Kentucky. This bill would put us more in debt for a private entity as well as raise taxes.

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