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New tax would target meals in restaurants

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By Ben Carlson

The city council's finance committee considered last week a recommendation to add a 3 percent tax to meals served by restaurants.

The recommendation was made by the Anderson County Tourism Commission, which unanimously approved the measure late last year. If eventually approved by Lawrenceburg City Council, it would raise about $300,000 a year.

The revenue would be split between the commission and the city.

The city's portion could be used for economic development, tourism and recreation. The commission's portion would provide funding to hire a full time tourism director, a move that could mean millions of dollars for Anderson County's economy.

"Tourism is a growth industry," said John Rhea, the commission's chairman. "Tourism is very important to Anderson County, and economic development and tourism go together. We're trying to grow and make Anderson County prosperous."

The tax would not affect restaurants outside of city limits, and Rhea said the commission by law cannot request the county's fiscal court to adopt the tax.

He said the tax would be charged by establishments whose primary function is serving food, including pizza and sandwich shops.

The measure, which would add 60 cents to a $20 restaurant bill, is already drawing the restaurant owners who say it would do serious damage to her already struggling businesses.

"I'm totally against it," said Mitsey Barnett, owner of Outskirts Restaurant located in Hilltop Plaza. "Taxes are already eating me up."

Rhea called the proposal a "pass through" tax that will not require restaurants to raise their prices.

"There is no charge for the restaurant itself," he said. "It's a tax charged at the cash register. If McDonald's is charging $2 for a Big Mac, the menu will still say that. But at the end on the bill, there will be percentage added on at that point. Menu prices won't have to be raised."

Barnett, owner of Outskirts, said that might be true for larger restaurants, but smaller ones will suffer because people already are having a difficult time finding money to eat out.

"I'm struggling right now because of the economy," she said. "Let alone jacking the taxes up. People can hardly afford to eat out now."

Margaret Perry, owner of Parkview Restaurant on Woodford Street, said she is also opposed to the tax, and that her customers will know only that the price they pay at the cash register has gone up.

"They get used to paying the same price, so this will look bad on me; like I'm raising my prices," she said.

Rhea said the owners of Talk of the Town and Brody's restaurants are on the commission. Talk of the Town is located on Broadway in the city. Brody's is located at Eagle Lake, outside city limits.

"We know we need the money," said Councilman Sandy Goodlett, who chairs the finance committee. "I'm in favor of it at this point, but I want more information."

The committee did not take action on the commission's recommendation, but planned to ask a commission representative to attend its next meeting to provide additional information.

Rhea said the funds are sorely needed to allow Anderson County to compete for tourism money.

"A full time director would maximize the county's exposure statewide and nationally," he said.

The funds could be used to advertise Anderson County's tourism opportunities in regional and national magazines, as well as bring writers to the area for what Rhea called "familiarization tours."

"The hope is that writers go back to where they come from and give good impressions in articles in their newspapers," he said.

A writer from the Mineapolis, Minn., area visited Anderson County in 2006 and wrote about his experience in a newspaper there. Later, when a college team had to travel through Central Kentucky, the writer said Lawrenceburg is a great place to stop.

"We got so much business from those articles," Rhea said.

Anderson County had a tourism director until the end of last year. Tami Vater, who also had roles with the Anderson County Chamber of Commerce and in economic development, did a good job in tourism, Rhea said.

"Every county has its own tourism director," he said. "We are competing against each other and right now we're without a director.

"The commission is non-paid, and there is more work and time than we can put into it to compete with Franklin and Mercer counties. Tami did a tremendous job, but we need to replace that position with a full time person and get back in the game.

"People should look at this as an investment in Anderson County. We know it's a tax, but it's also an investment in Anderson County."