As bourbon booms, school funding festers. Bourbon should pay its fair share. | Opinion

We’ve been here before.

Currently in Frankfort there’s another effort to pass a bill that would ease the tax burden of the booming Kentucky bourbon industry while simultaneously making it more difficult for school districts across the state to operate effectively and likely raising the tax bills of individual Kentuckians.

For those unfamiliar with House Bill 5, it is aimed at eliminating the distilled spirit tax — sometimes referred to as the “bourbon barrel tax.” It’s an issue especially important to Marion County where I serve as school superintendent, but when it comes to funding of public schools across the commonwealth, this bill should be important to everyone.

Kentucky’s main method of funding public education is through the SEEK formula which combines state and local funding. It can be at times confusing and not many outside of education understand its complexities. But as it relates to HB5, here’s what every school district should know: If the distilled spirit tax ceases to exist, the districts that have received those funds in the past will receive less in local taxes, meaning they will require more SEEK funding from the state, consequently leaving less SEEK funding available for all districts. It doesn’t matter if you’re home to multiple distilleries or zero, this legislation means less funding for schools.

Already, Marion County citizens have seen their share of funding for the school district increase over the past 15 years. Factoring in inflation, the local contribution in Marion County was 48% of school funding in 2022 whereas in 2008 it was 29%. If HB5 passes, even with projected additional state SEEK funding, Marion Countians will have to up their portion of the local effort.

Perhaps the most frustrating aspect of HB5 is that any attempt to remove the distilled spirits tax is essentially a solution in search of a problem. Our bourbon industry is strong and continues to grow. Last year, the industry saw a record year with over $2.1 billion in new investments — you can see evidence of this throughout Marion County. The distilled spirits tax benefits school districts and other local agencies such as libraries, county government, and sheriff departments so that the communities that distilleries call home can improve.

In Marion County Public Schools, for example, the distilled spirits tax brought in approximately $1.9 million this fiscal year. That number should grow significantly as the industry is expanding in our community, and that expansion means more opportunities to better serve our families and young people. Money generated from the distilled spirits tax is put toward things such as providing better, more competitive wages for school employees or being able to build much-needed new facilities.

Unlike bourbon, school buildings don’t improve with age.

Among the proponents of this bill, the argument goes that unless Kentucky reduces the tax burden on distilled spirits, distilleries will opt to set up shop in other states. Perhaps. Or perhaps the bourbon industry is in a prime position to leverage their success into avoiding this tax. My question then is what tax-related concession would be expected next? How beholden are we to the bourbon industry? With all due respect to the fine folks producing that powerful “brown water” we’re all so proud of, I like to think the best product Kentucky produces is well-educated young people.

The truth of the matter is that at a time when the bourbon industry is experiencing historic economic growth and success, public education continues to be underfunded and undervalued by those whose interests lie not with the common good, but with a bottom line. This legislation is another egregious example of how school children are seen as less important.

Chris Brady is the first-year superintendent of Marion County Public Schools with 22 years experience in public education.