Herald-Leader Editorial

Taxing district is a worthwhile goal

Investment would aid downtown

December 5, 2013 

Time ran out for the proposal to create a Downtown Lexington Management District this year.

That may be a good thing — it was clear that the Urban County Council and many downtown property owners didn't quite understand the proposal, which only went public in September.

However, Lexington needs this tool to improve downtown. It's not going to happen this year but it should one day, and the sooner the better.

Management districts are authorized to tax property owners within a defined district to raise money to improve the area.

There are 1,200 in the United States as well as in other countries and they carry out a variety of activities — from cleaning sidewalks to promotion to improving signage and security. They do not replace city services but expand on them.

By Tuesday afternoon when the council discussed the proposal, 38 percent of property owners within the proposed district, representing 52 percent of the value of that property, had signed a petition to establish the district.

That exceeded, although just barely, the demands of 33 percent and 51 percent, respectively.

Council members were concerned, reasonably enough, that many of the property owners who had signed were non-profits or government entities that don't pay taxes. There were also significant questions about the organization, structure and oversight. They voted to pass on it this year.

Councilman Steve Kay spoke for many council members when he said that while he is sympathetic to the concept, "this is an idea that needs more robust support."

A minority on the council seemed to find the idea of any tax, even with more support, inappropriate.

Ed Lane, noting that his downtown office costs might rise with the taxes, said "we need to be promoting a more vibrant economic environment and not raising taxes."

That's troubling because the point of a district like this is that property owners decide to tax themselves in order to invest in things that spur economic development.

This is not a new or unproven concept. It has worked in hundreds of places, including Louisville, which has had a similar district since 1991.

"This concept has become an essential tool for the economic development of downtown areas," the Louisville Downtown Management District notes on its web page.

The Downtown Lexington Corporation, which brought this idea forward and managed the petition effort, deserves credit for getting this far on a first try.

New ideas, especially when they involve new taxes, often take more than one try. That's a reasonable thing in a democracy, not a reason to abandon a good idea.

Thankfully, the DLC understands this, as president-elect Joe Terry made clear in his comments to the council after the vote: "I will assure you we will be back in 2014."

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