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The issue: Local alcohol option vote
Our view: Recipe has changed
Like many issues under Kentucky law, the local-option alcohol vote turns out to be a lot less clear than originally thought.
Yes for Economic Success says approval of the option in Radcliff, Vine Grove and Elizabethtown would benefit economic development by keeping money spent on alcohol in the county and would be another tool in local development arsenals.
For example, backers said, the ability to sell alcohol would facilitate a downtown Elizabethtown entertainment district with small full-service restaurants and perhaps a pub or two.
When petitions to bring the issue to a vote were circulated, Y.E.S., the group behind the effort, thought majority votes would bring package liquor sales and mostly unrestricted by-the-drink sales. However, a closer inspection of state law showed only Radcliff immediately would gain full wet status.
Elizabethtown and Vine Grove — not so much. Because they are fourth-class cities, local requirements on restaurants already in place would remain until a second vote could relax them. Elizabethtown requires businesses with liquor licenses to generate at least 70 percent of revenue from food sales and accommodate at least 100 patrons.
There are loopholes, though. City government can designate areas of economic hardship so restaurants or hotels could obtain licenses, relaxing sale limitations.
But Elizabethtown may have another option: Reclassification.
Yes, the topic rears its head again.
It still is unclear whether the so-called restaurant tax could remain in place if the city were to move to second-class status. Revenue from the controversial tax is financing construction of the city’s other main economic development project, the sports park. The cost of that development now is approximately $25 million. The money has been committed and construction is well under way. The city was able to levy the tax only because of its fourth-class status.
It’s unlikely that tax revenue from alcohol sales would come anywhere near equaling revenue from the prepared food sales tax. Particularly since the laws limit a second-class city’s ability to level a special alcohol impact tax.
Before Oct. 4, when voters head to the polls to approve or deny the local option initiative, Kentucky’s attorney general’s office needs to issue an opinion about the city’s classification options. The issue has been pending in Frankfort since 1994, when a constitutional amendment empowered lawmakers to come up with a new system, which they have not accomplished.
More specifically, residents of Elizabethtown asked Attorney General Jack Conway’s office for clarification about whether the restaurant tax could stay in place under a “grandfather” status. After more than 18 months, no opinion has been issued.
Kentucky tax laws seem to be one giant game of Twister. Taxing agencies such as cities and counties are limited in authority in ways that often seem counterproductive. The restaurant tax is financing a sports park designed to increase tourism. More restaurant choices are needed for tourists and residents. Backers of local-option alcohol sales say the ability to sell alcohol would attract new restaurants and help redevelop downtown Elizabethtown. Can the sports park be successful if the area cannot accommodate sports park visitors?
Elizabethtown City Council faces tough decisions that will upset constituents no matter what direction it takes. But they owe it to voters to announce their intentions sooner rather than later.
This editorial represents a consensus of The News-Enterprise editorial board.