Restaurant tax pushed

A proposal to place a 3 percent tax on meals served in city restaurants had a wide airing Monday as a tourism official briefed city and chamber of commerce officials on what he says are the idea's benefits.

The measure, if approved by the city council, would drive more customers to restaurants, pay to hire someone to direct tourism and economic development, and increase the number of visitors to Anderson County, according to Craig Stratton, chairman-elect of the Anderson County Tourism Commission.

"All we are trying to do is bring tourism dollars to Anderson County," said Stratton. "We feel everyone will gain from that."

The funds could also be used to maintain and upgrade the city's parks, Mayor Edwinna Baker said.

Stratton pitched the plan Monday morning to the Anderson County Chamber of Commerce's board of directors, followed by a meeting with the city's finance committee that afternoon.

Neither approved nor rejected the proposal, which was met with skepticism last week by some restaurant owners who said the new tax would seriously damage their already struggling businesses.

The tax would go into effect in July and raise an estimated $320,000 per year, which would be split between the tourism commission and city.

Stratton said the tourism commission would use its portion to hire a full-time director and promote Anderson County through a variety of advertising campaigns, including an idea to create brochures featuring local restaurants and place them in the county's "tourism hot spots" such as the two bourbon distilleries, Eagle Lake Convention Center, the chamber office, real estate offices and city hall.

The restaurants would also be featured on a tourism website. The promotions would include restaurants in the county which, under state law, cannot be forced to pay the tax.

During his pitches, Stratton said there are 27 cities in Kentucky currently collecting the tax, including nearby Springfield and Harrodsburg.

He said in "some" of those cities, restaurant receipts have "doubled" or "tripled."

When asked in how many of those cities that has occurred, Stratton said he wasn't sure.

"That's not something we've had time to actually look in to," he said, adding that he was filling in for tourism chairman John Rhea, who was on vacation.

The tax would not necessarily be limited to typical restaurants, he said, and in other cities includes all locations that serve prepared food such as deli counters at grocery stores and gas stations.

"That would be up to the city to decide who would be included," he said.

Mayor Baker said Monday it was unclear just how inclusive the tax could be, and wasn't sure at the time if food sold during the Burgoo Festival, 127 Yard Sale or during youth sports events would be subject to the tax.

Following Stratton's presentation, finance committee chairman Sandy Goodlett recommended that the proposal be presented to the city council, most likely at its May 12 meeting in city hall.

Baker, who attended the finance committee meeting, seemed enthusiastic about the idea because it would allow the city to maintain and improve its parks.

She said the city's share of the revenue, estimated at $160,000 annually, could not be used for general fund purposes, nor could it be used to directly support economic development initiatives such as buying land for an industrial park.

"It can only be used for tourism-related activities," she said, acknowledging but making no commitments that the money could help support long sought after projects such as an aquatic park or skateboard park.

Baker said the funds could also be used in the county park if the council chooses to funnel them through the recently created city/county parks and recreation board.

Also during the finance meeting, Charlie Cammack, president of LNB and chairman of the county's Economic Development Authority, revealed that the tourism director would double as economic development director.

Cammack said the person previously in that position, Tami Vater, had too many other responsibilities at the time to be effective. He said he's confident that one person could perform in both roles if that was his or her sole purpose.

Cammack said there is much more to economic development than bringing in large factories and the jobs they provide.

"We'd all like to see a large company come in and put 100 people to work, but I don't see that happening any time soon," he said. "We need to be in position to take care of the industry already here."

Cammack, referencing a mention about Georgetown's success in luring in Toyota, said, "You can say that was a home run or that they struck out because [Georgetown] did a lot of struggling. They weren't ready.

"We'd all like to hit a home run, but sometimes you have to hit singles to score."

Stratton said it would cost approximately $75,000 a year to hire a quality tourism/economic development director. He said the cost would be shared with the Economic Development Authority, which is funded in part by the county's fiscal court.

He said tourism is now funded only through a hotel room tax, which provides $20,000 annually.