Herald-Leader Editorial

Stealth move on Lexington hotel tax underscores need for reform

Can we ever talk reform like adults?

April 2, 2013 

No one can be happy about the way a proposal to allow Lexington to increase its hotel and motel tax was sneaked into the legislative process at the 11th hour last week.

Equally distressing, though, is that cities are treated like children under the Kentucky system that requires legislative approval before they can even consider raising a tax like this.

The measure in question was attached as an amendment at the last minute by a senator from Paducah to a bill about a totally unrelated matter. Executives at the Lexington Center, the Lexington Convention and Visitors Bureau and the Bluegrass Hospitality Association all said they didn't hear about it until the day it was voted on or the day after.

As it happens, even though it passed both houses, it didn't become law because it was too late — the House vote came 12 minutes before the end of the session — to reach the governor's desk for signature.

Regardless of the outcome in Frankfort, there was never any danger that the tax increase would go into effect without a full public vetting. The law, had it passed, only authorized Lexington to consider raising the hotel/motel tax by 1 percent. Lexington's elected Urban County Council would have had to consider the increase after providing notice that it would be on the agenda, and after hearing comment from the public.

We've long advocated for more local control over fiscal matters. Cities need more authority, through their locally elected bodies, to determine their own destinies.

In this case, the proposed increase apparently was intended to benefit the Kentucky Horse Park, an important tourist attraction and economic driver in Central Kentucky. There are legitimate questions about what the effect would be of an increase in the hotel/motel tax on conventions and other visitors to the area. However, the place for weighing the benefits versus the costs would be at the local level, where the greatest effect would be felt.

Gov. Steve Beshear has taken some important steps toward tax reform in Kentucky. A commission he appointed, led by Lt. Gov. Jerry Abramson, worked throughout last year to develop recommendations for reforming Kentucky's outdated tax code. Some of those recommendations made their way into law as part of the fix for the state pension system enacted in the session just ended.

But the day has yet to come when Kentucky has an open, adult discussion about fixing our tax code to match a modern economy and modern needs. When that happens — we hope soon — the discussion should include treating local communities like grown-ups who can made decisions about their futures.

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