"From a Lexington perspective, the true emergency begging the urgent attention of the Kentucky General Assembly wasn't even among the 67 items cited by Governor Fletcher in his recent call to the legislature to convene in special session.
Certainly Lexington needs speedy action on funding for a new general aviation runway at Bluegrass Airport. According to airport officials, qualifying for federal matching funds to relocate the runway requires that the airport receive $9 million from the state before January. The sense of urgency is raised a notch by a real need to complete this work in time to accommodate the World Equestrian Games in 2010.
And, also related to the Games but with long-term implications, is the very real need to fund as soon as possible a $38 million outdoor stadium at the Kentucky Horse Park.
But these issues, as important to Lexington's economic well-being as they are, pale in comparison with the competing dynamics of an expanding city that is burdened by an extremely limited revenue stream in a time of heightened aspirations to compete among the upper echelon of America's medium-sized markets and all that this implies.
With the retail and service industries accounting for a large and increasing portion of Lexington's economy, relying for more than 80 percent of the city's operating revenues on a payroll tax is not wise. In fact, unless and until our city attracts enough higher-paying industries to account for a truly significant increase in tax revenues under the existing system, we have a strong case for the presence of a bona-fide economic emergency.
With a pending settlement of Clean Water Act violations certain to cost the city and users of its storm and sanitary sewers hundreds of millions of dollars for repairs and upgrades, we're in for some tight times.
As a community that envisions becoming a "premier American city," however, Lexington is hog-tied and kept dependent on a chronically dysfunctional, partisan political environment in Frankfort by a state constitution that severely restricts the ability of communities to pay their own way on projects they deem uniquely important to their well-being.
Unless the constitution is amended, Lexington has no option to hitting business even harder with an even higher occupational license fee or higher insurance premium tax (in essence a gross receipts tax — a "sales" tax!) to accommodate growth — not to mention financing the sophisticated amenities of our dreams.
Our city and its people are more than capable of determining what is in the best interests of our community. We should not have to rely on state legislators from other districts, with no stake in our city's future, to be concerned about the pressing necessities of this growing city. In fact, under the present circumstance, we leave ourselves vulnerable to "horse trading" with those legislators to obtain scraps from the state treasury.
If we want to transform the heart of our city — downtown — to feature such attractive and humanizing amenities as a new park-setting in the center of a widened Vine Street; bike lanes and trails; an arts and entertainment district; streetside cafes where you can sip a cup of coffee and read the paper as life passes by or meet business associates or friends for lunch; and if we are sincere about accomplishing other key recommendations of the recently completed Downtown Lexington Master Plan, then we have to be willing to pay the tab for the public portions of these projects and not hope for a handout from Frankfort and Washington.
Taking a close look at how this very thing was accomplished in Oklahoma City is instructive.
Desperate to revive a downtown so dead the only thing rolling down the streets were tumbleweeds, Oklahoma City's leaders went to the public with a plan. They would create and complete — on-time and within budget projects in two distinct categories: capital building and recreation and beautification. To finance the work, voters were asked to approve a sales tax that would be as low as possible, would last for the shortest time possible and would be spent only on visible public projects. Persuaded, Oklahoma City voters approved a temporary one-cent sales tax in December 1993. In late 1998, voters were asked to extend the tax an additional six months to allow for collection of all of the funds still needed.
As promised, the tax was retired on July 1, 1999. During the 66 months it was in effect, more than $500 million was collected and applied to finance the projects. In addition, the revenue earned over $54 million in interest, which also was used for the projects.
Here's why Oklahoma City was able to do this and Lexington cannot. Oklahoma is one of 32 states that do not constitutionally bar their cities from enacting a local sales tax or from engaging in regional revenue sharing as a means to raise revenue to pay for locally unique needs. Kentucky does. And this must change.
According to a projection by the Kentucky League of Cities, a permanent one-percent sales tax in Fayette County would generate over $46 million in new revenues annually.
We recognize with prejudice that no one relishes taxes. But we also understand that nothing worthwhile in life is free and that we are weakened as a community by remaining subject to the exhausting political gridlock that has for so long characterized our state capitol.
So how about testing the waters by making the most of a coming opportunity and win the freedom to enact a program complete with a hard and fast "sunset" feature similar to Oklahoma City's?
As things stand, except for a modest increase in occupational license fees from temporary workers associated with the 2010 Games, the city has no ability to capture those additional revenues and benefit directly, as a community, from the event. Those dollars will slip through our fingers.
With Lexington expecting a one-time invasion of hundreds of thousands during the World Equestrian Games in 2010, just imagine the additional revenue a local option sales tax would raise! And of the good that could be accomplished here in our city!
In the brief time remaining, it would take something of a declaration of an emergency to pull off a Constitutional Amendment and the necessary implementing legislation for Lexington. But if the World Equestrian Games Foundation's latest crowd projections are accurate, it would sure be worth the effort. According to WEG Foundation CEO Jack Kelly, when spectators, competitors, their entourages, staffs, crews and vendors are taken into account, Lexington can anticipate 802,000 visitors during the 16 days of the event.
Imagine the windfall for our community. Seems like an "emergency" to us.
In the interest of genuine progress, we hope the Fayette County delegation to the Kentucky General Assembly will press for a constitutional amendment allowing Kentucky's growing cities to meet their needs as they see fit.
"