Corbin leaders poised to raise taxes on liquor, motels

Corbin city leaders will likely take the first step today toward making the price of liquor and a motel room just a little more expensive within the city limits.

The Corbin City Commission plans to meet in special session today and among items on the agenda are measures that would increases taxes on alcohol sold at restaurants in the city from six percent to seven percent, and the tax on hotel/motel rooms from three to four percent.

According to Corbin City Manager Bill Ed Cannon, the extra $20,000 to $25,000 garnered annually by the one percent increase in taxes on hotel/motel room rentals can only be used to help fund operation of the The David L. Williams Arena at the Southeast Kentucky Agriculture and Exposition Center – a 5,000-seat arena on the south end of town.

According to a profit/loss statement released by the city Tuesday, the arena has lost $74,418.66 since opening in March. According to a feasibility study conducted before the facility’s construction, it was estimated to lose about $300,000 in its first year of operation.

"We just felt like that if we didn’t do it, we would be hurting ourselves and hurting the city," Corbin City Commissioner Phil Gregory said. "Almost all of that tax is paid by tourists not people that live in Corbin … We should have done it a long time ago but it just kind of fell through the cracks."

Currently, anyone that stays at hotels or motels located in the city limits of Corbin pays a three percent tax to the city on the price of the room. All of the proceeds from the current tax go to the Corbin Tourist and Convention Commission. Pursuant to an agreement struck between tourism leaders and city leaders in 2006, 75 percent of those funds go right back to the city to help fund the arena. Cannon said the extra one percent would go directly to the city.

"It is really a no-brainer," Cannon said. "I don’t know anyone here in Corbin that stays in the hotels. Other towns and cities are much higher."

The profit/loss statement for the arena shows $739,299.92 in total revenues and $630,684.75 in operating expenses, which would normally be a net profit of $108,615.17. But capital expenses of $119,038.89 and pre-opening expenses of $63,994.94 ($183,033.83 total) accounts for the net loss.

Cannon said arena management has a promising slate of events set for this fall and winter that he hopes will help it beat expectations for its first year of operation.

"The startup on anything, especially something this big is tough, but things look very promising. There’s much more coming in the fall," he said. "The paint was still wet when we opened the doors on that place. We really pushed. I think after another year or two we will have a lot better feel for what is going on.

Only one event is officially on the arena’s schedule now: the "Simulate This Tour" feature rock bands Staind, Shinedown, Chevelle and Halestorm on July 22.

Arena officials have said the summer is typically a slow time for indoor facilities since most musical acts are playing outdoor venues.

"I’ve looked at some other facilities and they aren’t very busy either," Cannon said. "It’s just a slack time for touring."

In regards to the measure to raise the tax by one percent on alcohol sales, Gregory said the move would bring in about $16,000 to $18,000 more annually to the city coffers and would bring it in line with other cities that allow alcohol sales.

"When we first did this, the majority of the other towns at the time were using six percent," Gregory said. "We just figured we would go with that and if we needed to go up we could. Now it seems like seven percent is the standard. That’s what London is doing so it kind of brings us to where they are."

Cannon said the extra money would help defray the cost to the city for administrative and policing costs associated with alcohol sales.

Both tax increases must be approved twice by commissioners before they take effect. The commission plans to vote today only to authorizing City Attorney Bob Hammons to draft an ordinances regarding the changes.

Also on the agenda:

¥ A public hearing for the budget for the 2009-10 fiscal year, a budget message by the City Manager;

¥ Ordinances adopting the new budget and amending the budget from the previous fiscal year.

¥ Accept the resignation of Ronnie Jewell from the Fire Department and authorize the City Manager to advertise for his replacement.