Lexington Storm Sewer Tax

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In March 2008 the United States Justice Department, the United States Environmental Protection Agency (EPA), and Kentucky’s Environmental and Public Protection Cabinet (EPPC) announced a settlement with the Lexington-Fayette Urban County Government (LFUCG) in which the city would agree to make improvements to the sewer system in excess of $290 million in order to stop the unauthorized overflow of untreated sewage in Lexington. [1] This decision stipulated that the LFUCG devise a funding mechanism to cover the cost of these upgrades.

The proposal for a Lexington Storm Sewer Tax was first mentioned in the Lexington-Fayette Urban County Council meeting on April 8, 2008. You can read the minutes here.

The Tax Outlined

The tax would impose a $4.32 per 2,500 square feet of impervious surface (rooftops, driveways, sidewalks, etc...) fee on property owners in Lexington. The fee is based on the idea that the average residential lot has 2,500 square feet of impervious surface. Every single-family home and duplex, regardless of size, would be billed $4.16 a month. It is projected that the tax will raise $16 million dollars annually to upgrade and improve Lexington's sewer system. [2]

March 2009

The Urban County Council task force expressed a desire to have the storm sewer tax increase automatically each year in a 3-2 vote.

Support

Lexington mayor Jim Newberry has been in strong support of this tax. He claims that until a revenue source for the sewer problem is developed, the money to make repairs and improvements will come from the city's general fund.

Opposition

Many local business owners and their advocates (such as local publication Business Lexington) argue that imposing a tax during an economic recession is unwise. [3]

The average business in Lexington occupies 43,560 square feet thus making their sewer tax at the currently discussed rate $900 each year. The University of Kentucky for instance would be taxed $600,000, a relatively large sum of money for a business which has consistently raised it's own fees several years running. Business owners argue that this additional tax will cause struggling businesses to either fail or pass the cost of the fee onto consumers thus affecting the general population. The need to levy this new tax suggests a spending problem rather than a revenue problem within the city.

References

  1. Lexington agrees to major sewer system upgrades
  2. Task force wants Lexington storm-water tax to increase each year Lexington-Herald Leader March 13, 2009
  3. Council to hold two hearings on proposed storm water tax Lexington Herald-Leader April 25, 2009