Paducah city leaders say a restaurant tax could be the answer to funding city projects, like renovating City Hall and the Riverfront Development Project. Leaders say they're supporting a bill in next month's legislative session that would allow them to implement the tax.
As the law is written now, Paducah cannot implement a restaurant tax. There was an old law that said only fourth and fifth class cities like Madisonville and Shelbyville could implement a restaurant tax, but since then Kentucky has done away with city classifications entirely. Paducah leaders say they want the restaurant tax bill reformed to give all cities the ability to have a restaurant tax, but restaurant owners say the tax would unfairly cost both them and their customers.
The lunch hour's always busy around Kirchhoff's Deli. Co-owner Louis Kirchhoff says they've learned to adapt to changes and adjust the business.
"You either have to change with it or figure out something else," Kirchhoff says.
But, Kirchhoff says, a restaurant tax would cost him more money and time in resources. His says his biggest concerns are his customers, who will pay the 1 to 3 percent tax.
As for how much would that tax cost you, for a $6 sandwich at a 3 percent tax, the tax would cost about 18 cents.
Paducah Mayor Gayle Kaler says she only wants the opportunity to use this extra revenue. She says taxes are not popular, but she believes the extra money would go unnoticed by many and benefit the city even more.
"We have a lot of people from out of town that are visiting and eat here, and I doubt they'd even notice," Kaler says.
Kirchhoff asks that, if it costs the mom and pop shops, why even have it? "It adds up," he says. "And I'd say if we barely notice it, it's a nuisance tax."
Legislators will discuss the bill in the upcoming session next month. As for how much money the tax would generate for the city, Kaler says at 3 percent, it would mean an estimated $4 million a year.
But, as the bill is written, 75 percent of that $4 million would go to fund city projects. The other 25 would benefit tourism. The Kentucky League of Cities also supports the bill. A spokesperson for the KLC says about 20 percent of cities that can impose the restaurant tax have actually done so.
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