A recently released University of Kentucky College of Agriculture study says agricultural-related businesses contributes $2.3 billion annually to the Fayette County economy.
The study, “The Influence of the Agricultural Cluster on the Fayette County Economy,” showed 1 in 12 people in Fayette County worked in agriculture or agriculture-related industries. Those industries include direct farm work, the UK School of Agriculture, veterinary medicine, horse and other trade organizations, and the Blue Grass Stockyards.
Alison Davis, executive director of the Community and Economic Development Initiative of Kentucky, one of the study’s authors, presented the findings at the Lexington-Fayette Urban County Council work session on Tuesday. It’s an update from a 2012 study.
“Ag in this county is diversifying,” Davis said. “We are no longer a county of just horses and tobacco.”
Local food production has revved up with more local businesses using local food, Davis said.
The study showed that jobs with agricultural ties generated $8.5 million in occupational taxes. Occupational taxes are the merged government’s main source of revenue.
City revenue records show employees working directly for employers in agriculture, forestry, fishing and hunting generated $1.9 million in occupational taxes over the past 12 months. That’s less than 1 percent of the total revenue the city collects from occupational taxes.
“It’s an important part of a diverse urban economy,” Davis said of the agricultural community.
In 2012, the study included employees of Jif and local Coca-Cola and other bottling companies. Those employees were taken out of the study released Tuesday, Davis said. But Davis said the economic impact of agriculture-related businesses is likely larger. There are law firms, accountants, bankers and insurance companies that serve agriculture-related businesses that were not directly counted in the $2.3 billion.
The study was presented less than a week after the merged government’s planning staff recommended that the county’s urban service area or its growth boundary remain and that no new land be added for development. That recommendation is part of a much larger five-year comprehensive plan. The Urban County Planning Commission could take a vote on the plan as early as late August. The commission’s recommendations will then be forwarded to the Urban County Council for a final vote, likely sometime in the fall.
The debate over whether to expand the urban service area has been contentious for years. The growth boundary was last expanded in 1996. Those who argue for expansion say there is little land available for development, particularly for new single-family houses. Those who argue to keep the growth boundary counter that there are more than undeveloped 5,000 acres inside the current urban growth boundary.