Dining tax may go away

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City council votes to end restaurant tax

By Stephen Lega

The Lebanon City Council has voted to eliminate the city's restaurant tax.

Councilman Jerry Abell made the motion during Monday night's meeting, March 7, which was seconded by Councilman Kenny Marrett and officially approved 5-0 by the council. Councilwoman Denise Fogle did not cast a vote on Abell's motion, but under parliamentary rules, her non-vote is included with the majority.

Councilwoman Kate Palagi, who recently gave birth to her fourth child, was not present at the meeting.

Monday's vote is only the first step toward eliminating the restaurant tax, however. The council must approve two readings of an amendment to its tourism ordinance and that amendment must be published officially before the tax would end.

Marrett initiated the discussion about tourism at the end of the March 7 meeting. After the editorial in last week's Enterprise, Marrett said he received three emails urging an end to the abuse of tourism dollars, expressing concern for wasteful spending of tax money, and stating that they were appalled at the blatant disregard for the taxpayers hard-earned money.

"These statements reflect the heartbeat of this community, of how they feel about how our tourism dollars are being spent," Marrett said. 

He reminded the council that he had been appointed to the tourism commission in hopes of saving tourism and in an effort to alleviate some of the discontent in the community.

"It's time that this city council took some action of their own to help eliminate this situation," Marrett said.

Mayor Gary Crenshaw said the council could adjust the tourism tax rate, eliminate the restaurant and/or hotel tax or eliminate the tourism commission.

Marrett added that the city council works with the tourism commission in some communities without a director and without a tourism office, and in other communities tourism is under the economic development office.

City Attorney Kandice Engle-Gray said that is correct. She also said any move to alter the tax, to alter the commission or to alter the make-up of the board would require an amendment to the tourism ordinance.

Dennis George and Brad Lanham were appointed to serve on the tourism commission during Monday's meeting. George, who was on the council when the tourism ordinance was approved, was also at the meeting. He said he had never seen a commission micromanaged by the council the way tourism has been. At one point, George urged the council to let the commission do its job.

Marrett said the commissioners are already at odds with one another. 

"It won't be if the council doesn't meddle," George said.

"Who's meddling?" Marrett asked.

George asked Marrett if he had threatened to do away with tourism if Hamilton wasn't fired by 5 p.m. Monday. Marrett said he spoke with the mayor earlier in the day to ask the mayor to help him avoid a public embarrassment of Hamilton.

George asked Marrett if he had said he would bring up the abolition of tourism if Hamilton wasn't terminated.

"Yeah, because there's no other hope," Marrett replied.

At a different point in the meeting, Marrett said he has no desire to shut down tourism.

"I think [tourism] could be the greatest thing that ever hit this community, but it has turned out to be nothing but a big nightmare," he said.

At one point, Marrett made a motion to close the tourism office, to prepare a severance package to the tourism director and secretary, to temporarily move the tourism under the economic development office, and for the city council to hold meetings with local restaurants, hotels and the public to determine the direction of tourism's future. That motion died for lack of a second.

Councilwoman Denise Fogle said Marrett shouldn't be basing his view on three people who sent him emails. 

"I haven't heard anybody being negative," Fogle said. "All I heard is positive."

Marrett said he'd also received comments from hundreds of others in the community.

Mayor Gary Crenshaw commended Marrett for bringing some issues to light, and he agreed that some things needed to change as far as accountability with tourism.  Crenshaw also praised Hamilton for the work he's done. Crenshaw noted that Hank Phillips, a state tourism official, and Kim Huston of Bardstown have been complimentary of Hamilton's work.

Councilman Jay Grundy agreed that changes are needed, and he suggested a re-evaluation period, possibly three or six months.

"We're not here for ourselves. We're here for the people, and if they're not happy, we've got to represent that," Grundy said.

Councilman Abell said tourism has disrupted the community.

"The local people are disgruntled, and I think the disgruntlement is from our restaurant tax," Abell said.

Abell then moved to eliminate the restaurant tax.

"If you do away with it [the restaurant tax], you gut the tourism commission," Crenshaw said.

According to the 2010-11 tourism budget, the tourism commission projected that it would receive $237,500 in revenue from the restaurant tax and $28,600 from the hotel tax.

Crenshaw said the city couldn't operate a tourism commission on the hotel tax revenue alone.

"Everybody's up here saying we're for tourism. This is all devolving down to Chris Hamilton, and we're going to get rid of tourism any way we can to get rid of Chris," Crenshaw said.

Abell said this was not about Hamilton or eliminating his job.

A few audience members expressed doubt, replying, "Yes, it is."

Former Councilman Bill Pickerill said he was tired of paying insurance taxes, sewer fees and the occupational tax, but the city couldn't survive without them.

Marrett said people are upset about the wasteful spending.

Pickerill asked about the money tourism had recently approved for the Heart of Kentucky Bourbon and BBQ Musicfest. Pickerill said he doubted it would generate enough tax revenue to cover the $12,000 investment.

Marrett said the festival couldn't happen without that funding, and he added that the tourism taxes aren't really enough for a director's salary, either. 

According to Crenshaw, Abell's motion would vote out tourism.

Abell disagreed, saying he thinks the commission could get by working with local businesses and organizations like the chamber of commerce and Main Street Committee. Crenshaw pointed out that tourism is the primary funding source for Main Street.

There was support for Abell's motion among the audience as well. Chaser's restaurant owner Charles Mills said he has not received any benefits from tourism, although he's sure Hamilton would bring up specific instances when he sent groups to his restaurant.

"I hear a lot from people about tourism, and they say they're not getting any bang for their buck," Mills said.

Jim Avritt Jr. also spoke in favor of eliminating the restaurant tax. Avritt reminded the council that he was against the tax before the city had a tourism commission or director.

"I believe we are taxed, taxed and taxed to death," Avritt said. "We are sick and tired of paying taxes."

He would support keeping the hotel tax in place, but he said local citizens, not tourists, are the people who pay the restaurant tax. 

 "This community was built on agriculture and light industry," Avritt said. "It wasn't built on tourism."