The amounts of tax revenue they quote seems to change faster and more frequently than the weather in Kentucky, and that is saying something!
Here are a few examples of their constantly changing tax numbers:
“$20 million in new tax revenue in the short term.”
-Press Release Packet, March 3, 2008
“$55 million over 5 years.”
-at Press Release, March 3, 2008
“It’s estimated that in the first five years alone, added tax revenue would be between 38.5 and 66 million dollars.”
- Posted on the Food with Wine web site on March 3, 2008
“$59 million dollars over 5 years.”
- In their “Pass House Bill” article, Herald Leader published March 25, 2008
“I believe the numbers over the next few years are about 70 million dollars.”
- Curtis Segretto, Elk Creek Winery, on WKYT-TV 27 CBS, December 25, 2008
“Our most recent number indicated that over five years, the economic impact would be about 85 million.”
- Food with Wine Coalition spokesman Luke Schmidt, Lexington Herald Leader Article, August 31, 2009
“…proponents believe the change would produce $30.1 million in additional tax revenue for the state over the first two years.”
- Food with Wine Coalition spokesman Luke Schmidt, Courier Journal Article, September 11, 2009
Where do these projections come from?
- They say their projection is based on South Carolina and Louisiana sales figures, but tax structures in South Carolina and Louisiana are not comparable to Kentucky.
- To raise more than $15M in NEW tax revenue each year, sales would have to more than double.
- During fiscal year 2008-2009, the Commonwealth received $14.7M in tax revenue from the sale of wine, including high-end wines not generally carried by grocery stores.
- This would require enormous amounts of out-of-state wine be sold because sales of Kentucky wines are exempt from wholesale tax (KRS 243-884).
- Profits at out-of-state groceries will be sent out of state instead of staying with local families and spent in local communities.
- Grocers claim that they will need to hire more employees in order to “deliver and stock” the wine. The truth is that Kentucky law requires that the wholesaler deliver the product to the retail site. They may hire an extra teenager to stock, but it is more likely that they will use existing teenage stockers. The question should be “What happens to those employees in the current grocery-owned package stores when they close those doors because they’ve moved the wine inside?” The reality is that you will see a net loss in jobs, especially when you factor in the small independent package stores that will be run out of business by these out-of-state corporations.
- What happens to the bourbon industry when many small, local retailers are forced out of business?
- There will surely be a negative effect on the bourbon industry and that is why Kentucky’s distilleries oppose this legislation. How much tax revenue will the Commonwealth lose because of decreased sales of bourbon and other spirits (that have a higher tax rate than wine)?
Do these numbers seem accurate, logical, or reasonable?
