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Spending Your Tax Dollars: Tourism, KIPDA don’t get your money

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Their revenue is generated outside of tax bills

By Todd Martin

The Kentucky Auditor’s Office is trying to redefine the thousands of special taxing districts that litter the commonwealth’s counties.

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In July, legislation that was designed to make the districts more transparent and open to the public went into effect. The goal was to shine a light on the billions being spent by these entities that are largely filled by appointed personnel who don’t need approval to get tax or spend.

Through a series of stories The Sentinel-News has explained how each of the districts affecting taxpayers in Shelby County operates (including today’s final installment on the Health District). However, when the state renamed the districts as Special Purpose Government Entities, it lumped in two more groups that operate differently.

The Shelby CountyKY Tourism Commission and Visitors Bureau and the Kentuckiana Regional Planning and Development Agency (KIPDA) were both lumped in with districts such as the public library, fire departments and the extension office.

The difference, though, is that neither KIPDA nor tourism will show up on your tax bill.

KIPDA is an association of local governments in a 9-county region that stretches from Floyd County, Ind., east to Henry, Shelby and Spencer counties.

The agency provides regional planning, review and technical services in the areas of public administration, social service and transportation. It also provides ridesharing programs and services for residents older than 60. But primarily, the agency has been designated by the state as the regional review agency for both organizations and governments submitting applications requesting federal or state funds. For instance, KIPDA has been assisting the city of Shelbyville in its work to obtain a Community Block Grant to help purchase and rehab the Blue Gables Motel on the corner of 8th and Main streets.

KIPDA is funded by Intergovernment Revenues, with almost 68 percent of its nearly $25.5 million budget this year coming from state government and another 26.5 percent coming from the federal government. Local county and city governments provide less than 1 percent of KIPDA’s revenue.

Likewise, the county tourism commission doesn’t receive any funds from the county or cities that it serves. In fact this is the only public agency in the county that is funded almost completely by money from non-residents.

The tourism tax, paid by persons who stay overnight in motels, hotels and other forms of lodging, is 3 percent, set in 1989 by state statute. If certain facilities were to be constructed – such as a convention or performing arts center – 1 percent could be added to contribute to that facility’s operating expenses.

“Our funding comes trough the three percent transient tax,” said Katie Fussenegger, the commission’s executive director. “That’s collected through any lodging facility. In Shelby County that consists of five branded hotels, one independent hotel, two bed and breakfasts and two vacation rentals. Basically any room you stay in is going have that three percent fee added on.”

During the past five years, that fee has brought in about $756,661 in revenue, or roughly $151,000 per year.

 

Marketing role

A 7-person commission oversees the work the agency’s work, and Shelby County Fiscal Court, Shelbyville City Council and the Simpsonville City Commission review budgets.

“If they don’t like what we’re doing, they can suggest changes to us,” Fussenegger said. “We also are required by state statute to have an independent audit each year, and the standards we’re required to uphold are consistently more intensive and more expensive. So the new standards issued are really no change for us.

“We have very strict guidelines that we have to follow as required by state statute, so we already have a long set of check and balances.”

The largest expenditure for the commission is a combination of marketing/advertising and payroll.

“This is based on research we did a long time ago, but we try to make sure we dedicate at least half of our payroll expenses to marketing,” said Charlie Kramer, the commission’s tour director and its original executive director. “Katie spends a ton of time dealing with our Web site, adding items and working with other groups to have our site work better for us. We don’t just have a company working on our site for us, that’s all Katie. And I spend the majority of my time on tours, working directly with the people.”

The agency spends about $50,000 on advertising and promotion, and Fussenegger and Kramer estimate that of its $67,000 payroll for 2013-14, about $30,000 could be attributed to their time spent on marketing efforts.

 

$75 million impact

Along with working together with Web sites such as Trip Advisor and with the Kentucky Travel and Tourism Cooperative, which helps market Kentucky through sources online with keyword placement, Fussenegger and Kramer note it’s their one-on-one marketing that sets Shelby County apart, and a big reason that more than $75 million comes into the county through tourism.

“Most tourism groups around the state don’t have people coming to their door, but we do, and that’s a big advantage for us,” Fussenegger said.

Kramer’s tours have been a big reason for that. Whether he’s taking groups through horse farms or the house at Undulata or alpaca farms, Wakefield-Scearce Galleries or Claudia Sanders’ Dinner House, where he worked with Colonel Sanders as a manager before taking over in 1989 the newly formed tourism office, Kramer’s tours show off all of Shelby County.

“We’re in kind of a strange place,” he said. “In larger areas, you’ll have what they call receptive operators. Those are people that offer tours and other things that people can do outside of what they came for, like a conference or business. We don’t have that here, so we became that. I think we are the only bureau in the state that offers things like that. The more things they find to do, the longer than stay here.”

 

Tourism commission

Justin Sewell – Chair

Dori Lewis – Treasurer

Jay Dholakia

Sharon Calvert

Jennifer Reese

Leslie McCarthy

Vance Reister

 

Regular meetings are the last Tuesday of every other month at the Cardwell House, 316 Main St. in Shelbyville. The next meeting will be Nov. 26, and meetings are open to the public. Check the commission’s Web site, www.visitshelbyky.com, for more information.