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From YouTube: Bourbon Barrel Taxation Task Force (9-23-22)
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A
For
coming
out
today,
I
know
that
I
think
I
have
two
members
coach
here:
McCoy's
on
vacation,
Senator
Angel
has
some
sickness
in
her
family
and
I.
Think
it's
been
discussed
before
keep
her
and
her
family
and
our
thoughts
and
prayers
I
want
to.
After
we
do
the
approval
of
men
is.
Do
we
have
a
motion
for
approval
of
the
minute
motion?
Second,
any
objection
minutes
are
approved
before
we
get
in
the
agenda.
A
A
I
had
an
individual
show
up
at
my
house,
the
other
night
knock
on
my
door
and
tell
me
how
there
was
a
solution
that
was
totally
repealing.
The
ad
valorem
tax
on
Bourbon
barrels
and
I
said:
where
was
that
coming
from
well,
I
won't
say,
but
it's
not
the
best
thing
in
the
world
to
come
to
somebody's
house
at
night
to
knock
on
the
door
to
give
you
information.
That
is
wrong,
especially
somebody
who
grew
up
in
Clay
County.
A
A
It
allows
me
to
sleep
better
instead
of
getting
knocks
on
my
door
late
at
night,
I'm
sure
others
on
the
the
task
force
have
heard
that
I
know
it's
political
season
too.
So
everybody
likes
to
do
things
for
politics
well
in
26
years
of
being
in
the
legislature,
I've,
yet
to
run
a
negative
ad,
can't
say
what
other
people
have
done,
but
at
some
point
in
time
the
dialogue
has
to
be
such
that
you
think
about
the
issues
and
answers
and
not
the
politics.
A
So
with
that
we're
going
to
move
forward
with
today,
you
know
and
I'll
I'll
say
this:
the
importance
of
this
industry
and
the
impact
it
has
in
a
very
positive
way
and
I
had
my
colleague
who
was
in
the
majority
in
Virginia
here
yesterday
and
he
was
in
Nelson
County
in
Bardstown
and
he
was
saying
wow.
These
are
some
really
wonderful
schools
and
wonderful
facilities.
How
do
they
afford
to
do
that?
If
I'm
not
badly
mistaken?
A
The
Nelson
County
School
System
gets
five
million
dollars
in
ad
valorem
tax
from
bourbon
barrels.
I
said
probably
somewhat
related
to
the
tax
base.
That's
been
created
by
a
good
economic
environment
and
we
want
to
see
that
continue,
and
my
colleague
from
Virginia
was
really
surprised
about
that
and
we
had
a
long
discussion
about
that
issue.
A
So
with
that
we're
going
to
continue
to
have
discussions,
we
are
going
to
continue
to
understand
what
the
facts
are,
as
it
relates
to
impact
of
a
move
one
way
or
another,
or
no
move
at
all
on
the
overall
economic
and
taxing
Dynamics,
as
it
relates
to
the
bourbon
industry.
D
E
Right,
thank
you
chair
president
Stivers
and
members
of
the
task
force.
I'll
tell
you
I.
All
of
my
in-laws
are
in
or
near
Clay,
County
and
I.
Don't
even
go
visit
them
without
a
whole
lot
of
warning.
First
for
them
to
know
I'm
coming
and
even
when
I
give
a
morning,
sometimes
especially.
E
Thank
you
all.
First,
thank
you
for
letting
us
thank
you
for
forming
this
task
force
and
working
on
this
so
much
over
the
interim
and
thank
you
for
making
time
and
making
sure
that
Kate
on
behalf
of
all
of
our
school
board,
members,
superintendents
and
District
leaders
that
ksba
has
been
given
time
this
month
to
come.
Talk
about
some
of
these
issues.
E
I
think
a
lot
of
ground
has
been
plowed
already
in
the
previous
month's
testimonies
from
different
groups
right
from
the
beginning,
so
I'm
not
going
to
re-plow
any
of
that
a
lot
of
what
you
have
heard
from
some
of
the
other
groups
on
how
the
Tax
Works,
how
this
is
assessed
and
collected,
applies
the
same
for
school
boards
as
it
does
other
localities
that
tax
cities
and
counties
and
so
forth,
so
I'm
not
going
to
redo.
Any
of
that.
Just
know
that
a
lot
of
that
is
the
same
for
us.
E
However,
some
aspects
of
school
board,
property
taxes
and
finances
are
really
unique.
So
that's
what
I'm
going
to
try
to
focus
on
fairly
briefly
today.
You
just
give
me
the
warning
on
time,
because
I
could
talk
about.
Seek
and
property
taxes
all
day,
long
and
I
would,
if
you
let
me
I,
used
to
work
when
when
I
was
on
the
a
r
committee
staff
years
ago.
This
is
some
of
the
exact
work
that
we
did
there.
E
So
I
love
talking
about
it,
some
of
those
school
specific
issues
where
we
are
a
little
bit
different
from
other
municipalities
and
localities
or
what
we
see
on
the
screen
that
I'll
talk
about
the
nickel
levees,
the
nickel
taxes.
Probably
everybody
in
this
room
knows
a
lot
about
what
that
means
of
plenty
of
people
out
in
the
world
that
might
be
watching
this.
Don't
so
I'm
going
to
talk
a
little
bit
about
what
nickels
are,
how
they
are
restricted
and
how
that
revenue
is
used
in
districts.
You
can
see
their
KDE.
E
E
E
It's
a
little
old
now,
the
lrc
staff
oea
did
a
research
report
called
understanding
how
tax
Provisions
interact
with
the
seek
formula,
the
numbers
in
there
a
little
old
it's
about
10
years
old.
However,
explaining
this
entire
interaction
of
what
taxes
school
boards
impose
compared
to
like,
where
that
comes
from
the
assessment
and
how
the
seek
formula
interacts
with
that
it's
a
great
report.
All
of
that
information
is
mostly
still
current
and
relevant.
A
lot
of
that
hasn't
changed
since
then
in
the
law,
so
I'll
link
to
that
as
well.
E
This
is
a
well-worn
copy,
highlighted
I'm
going
to
have
it
buried
with
me
because
I'm
in
it
all
the
time.
This
is
complex
and
even
I,
myself
constantly
have
to
say.
Gosh
I
have
to
read
that
again
and
remember
how
this
works:
we're
going
to
talk
a
little
bit
at
the
end
about
the
importance
of
100
Fair
cash
value,
assessment
of
all
property
in
school
districts
to
ensure
Fair
funding
from
the
state
across
school
districts.
E
The
state
government,
you,
the
general
assembly,
giving
more
or
less
money
to
districts
based
on
many
things,
special
needs
of
students
in
the
districts,
fairness
of
how
much
you
give
so
that,
ultimately,
we
want,
as
close
as
possible
to
the
same
amount
of
money
ultimately
spent
on
education
in
every
district
in
Kentucky.
So
many
factors
of
all
this
formula
ties
back
to
the
full
Fair
cash
value
assessment
to
capture
that
fairness,
so
that
I
mean
we
talk
about
property,
rich
and
property,
poor
school
districts.
E
That
is
just
the
proxy
that
we
have
chosen
for
decades
and
decades
to
measure
how
much
money
you
should
give
to
communities.
So
that
is
why,
more
than
any
other
tax,
there
are
more
restrictions
on
property
taxes
in
Kentucky
because
of
the
Constitution,
it's
the
oldest
tax
that
we
have
and
because
that's
almost
the
only
tax
that
school
boards
can
really
use.
It's
the
main
primary
tax
school
boards
use
and
because
the
value
of
the
property
forms
the
basis
of
all
of
these
State
funding
calculations.
E
It
is
just
especially
important
that
we
really
look
closely
anytime
we're
going
to
exempt
any
class
or
kind
of
property
at
all
and
what
that
would
mean
and
that
all
of
the
pvas
that
assess
most
of
the
property
and
some
property
that's
assessed
at
the
state
level
like
bourbon,
is
it's
so
important
that
that
is
fairly
inaccurately
assessed
or
unfairness
will
result
and
then
I'm
going
to
close
with,
at
the
end
with
something
that
I
believe
several
of
you
have
brought
up.
I
know,
president
Cyrus,
you
have
mentioned
before
in
discussions.
E
Kind
of
a
similar
thing
happened
also
gosh
about
10
years
ago,
now,
seven
or
eight
ten
years
ago.
A
similar
thing
happened
where
a
large
class
of
property,
it
was
not
Exempted
and
the
tax
was
not
repealed,
but
it
just
all
at
once.
Very
suddenly.
The
assessment
of
what
it
was
worth
was
decreased,
and
that
was
that
class
of
property
is
isolated
in
a
few
areas
of
Kentucky
and
I'm.
E
A
Have
not
let
me
let
me
stop
you
so
people
understand
what
that
is.
Certain
minerals
became
unminable
unmirchable,
even
though
they
had
been
taxed
as
minable
merchantable
under
the
unmanned
minerals
tax,
devaluing
the
property
tax
values
for
about
38
counties
at
a
minimum
which
impacted
the
Sikh
formula.
E
Yes,
sir,
the
the
way
that
the
state
and
it's
very
similar
in
a
lot
of
ways,
the
state
centrally
assessed
what
the
value
of
unmined
coal
primarily
was
worth
to
tax
it
at
the
state
and
local
level,
and
so
very
similar
to
this
is
the
the
bourbon
is
sort
of
centrally
assessed
up
here
at
the
state
level,
and
so
when
the
value
of
that
changed
a
lot
substantially.
E
So
I
don't
have
a
lot
of
slides
this.
What
what
you
see
on
your
screen
now
and
in
the
panned
outs?
This
is
in
the
year
20
2014,
the
the
school
districts
shaded
in
blue
were
the
districts
that
had
any
aging
bourbon
stored
that
was
part
of
their
assessment
and
was
paying
taxes
to
these
school
districts.
E
E
I
bring
this
up
I'm
going
to
show
the
expansion,
the
wonderful
success
story,
The,
expansion
of
the
industry
not
only
more
and
more
of
the
bourbon
distilled
and
aging
in
these
districts,
but
then
on
the
next
slide,
moving
and
having
more
of
it
stored
in
other
districts.
Since
2014.
E
I
went
back
to
this
to
pull
some
of
this
information
because
I
believe
that
was
around
the
time
just
in
a
prior
work
that
I
did
here
at
the
general
assembly.
This
issue
has
come
up
before.
Of
course,
we
all
know
it
has
come
up
even
before
the
non-refundable
tax
credit
tied
to
this
was
created
several
years
back.
I
remember:
some
research
was
done
around
this
year.
Maybe
in
2014
there
was
the
same
sort
of
analysis.
The
nonpartisan
staff
looked
at.
E
What
would
the
impact
be
through
the
seek
formula
if
all
of
this
was
just
repealed
kind
of
all
at
once
and
I
remember
at
that
time
they
were
just
relatively
few
school
districts
in
that
list
of
like
the
bourbon
school
districts,
and
we
looked
at.
There
was
all
other
things.
Staying
constant.
There
would
have
been
like
a
small
increase
for
some
in
the
state,
seek
money,
a
decrease
for
others,
the
same
kind
of
thing
that
we
saw
in
the
first
meeting
of
the
task
force.
I.
E
E
So
this
is
sort
of
the
group
we're
looking
at
now
of
districts
that
are
the
ones
that
might
be
impacted
if
any
sort
of
change
happens
to
this
now
and,
of
course,
depending
on
what
that
change
is
and
depending
on
any
approach
that
you
might
take
to
reduce
the
negative
impact
in
any
of
these
districts,
we
have
to
assume
that
if
it
continues
to
grow,
which
everybody
hopes
I
mean
I
want
every
industry
to
grow
in
every
school
district.
E
If
it
continues
to
grow,
there
might
be
additional
school
districts
kind
of
coming
online,
where
new
warehouses
are
built
into
the
future.
I
mean
I,
think
everybody
hopes
that
that
happens.
So
looking
at
another
seven
years
into
the
future,
this
same
chart,
many
more
districts
might
be
shaded.
That
would
fall
under
this
situation.
E
These
are
just
again
going
back
to
kind
of
all
the
bourbon
districts,
as
you
can
see,
almost
all
of
them
have
one
or
more
of
these
nickel
taxes
imposed
that
is
collected
on
everyone's
real
property,
everyone's
house,
all
the
land,
tangible
property,
including
the
bourbon
that
we're
talking
about
so
to
talk
a
little
bit
more
about
the
impact.
That's
one
of
those
things
where
I
don't
know:
County
governments,
fiscal
courts-
don't
have
something
quite
like
this
nickel
tax,
we're
talking
about
that's
one
of
those
specific
school
things,
that's
unique
to
us.
E
This
is
showing
this
is
one
school
districts,
one
of
the
bourbon
districts
actual
seek
calculation,
chart
kind
of
the
the
most
current
one.
That's
available.
An
entire
portion
of
every
District's
seek
calculation
chart
is
all
about
the
Nickels,
so
you'll
always
see
you'll
pull
up
one
District's
example.
You
will
see
if
there's
any
amounts
there.
You'll
know
that
they
have
one
or
more
of
that
kind
of
nickel
Levy.
They
are
collecting
this
much
money
at
the
local
level.
E
That's
restricted
to
usually
Debt
Service
or
projects
so
you'll
see
there
is
some
of
the
nickels
are
equalized
with
State
money.
Some
are
not
so
you
see
in
this
example,
I've
highlighted
two
of
the
Nickels.
This
one
bourbon
district
has
I
believe
one
recallable
nickel
and
the
fspk.
That's
the
first
one.
Every
district
has
to
have
the
fspk,
so
every
district
has
one
of
these
nickel
rates,
so,
as
I
said
that
the
districts
that
I
highlighted
in
blue
have
gone
over
and
above
this
district,
for
example,
has
one
recallable
nickel.
E
A
Giving
you
the
correlation
between
that
and
the
unmined
minerals
tax
when
you
project
it
out
on
a
20-year
bond
issue
that
you
were
going
to
have
an
unmined
minerals
tax
that
was
coming
into
the
school
system,
then
it
becomes
unmountable
unmirchable
because
of
the
circumstances
around.
That
removes
the
funding
stream
but
you're
in
year
10.
But
you
still
have
10
years
left
of
the
bonding,
but
you
have
removed
one
of
your
components
of
the
funding
stream,
which
makes
it
harder
to
continue
that
Bond
payment.
E
A
E
So
I'd
like
it's
like
a
mortgage,
I
mean
you're.
You
can't
go
back
in
time
and
not
issue
the
bond.
You
got
you're
on
the
hook
for
those
Bond
payments.
That's
exactly
right.
The
the
state
amount
you
see
there,
the
we
sometimes
call
it
matching
money,
but
it's
never
a
dollar
for
dollar
match,
but
that's
the
concept.
So
the
state
will
give
some
money
to
kind
of
give
additional
money
and
support
to
districts
that
have
these
nickels.
E
The
amount
of
what
the
state
gives
is
based
on
not
only
the
sort
of
the
per
pupil
assessed
value
of
the
property
in
that
District,
but
how
that
compares
to
these
Statewide
levels
of
sort
of
per
pupil
property
assessment,
and
so
I
mentioned
that
to
say
that,
just
like
the
rest
of
the
seek
formula
if,
for
example,
a
sizable
piece
of
the
assessed
value
in
this
District
was
repealed
and
Exempted,
the
local
amount
of
Revenue
would
absolutely
fall
for
these
nickels.
The
state
Equalization
amount
there
may
or
may
not
increase
to
sort
of
make
up.
E
For
some
of
that.
That
would
depend
also
on
what
is
happening
in
all
the
other
districts
and
at
the
Statewide
per
pupil
assessed
value
level
where
we
set
the
level
of
Equalization
that
we're
sort
of
bringing
districts
up
to
that
is
hard
to
estimate
when
you're
trying
to
estimate
out
the
impact
of
a
proposed
change
in
that
at
all.
So
I
just
want
to
say
the
nine
hundred
and
forty
thousand
dollar
amount.
If
you
did
just
repeal
the
bourbon
in
this
District
would
fall.
E
The
565
thousand
probably
would
increase
in
some
amount,
but
we
don't
know,
maybe
not
enough
to
fully
cover
that
and
they
might
have
another
net
negative
impact,
but
then
they're
still
on
the
hook
for
the
bond
payment
so
now
kind
of
to
the
second
bullet
point
back
on
the
opening
slide
of
kind
of
the
second
topic
moving
beyond
Nichols,
which
was
mostly
just
cautioning
us
to
all.
Keep
that
in
mind
of
what
impact
it
would
have
on
nickels
and
Debt
Service.
E
E
But,
however,
the
reason
why
in
none
or
almost
know
of
the
dis,
none
of
the
districts
was
there
kind
of
a
total
net
wash
on
that
there
was
this
net
negative
impact
is
because,
where
you
see
the
highlighted,
yellow
thing
that
says
less
30
Cent
local
effort,
the
seek
formula,
that's
calculating
to
sort
of
give
them
a
little
more
money
because
their
assessment
fell
is
based
on
if
their
tax
rate
was
30
cents
per
each
100
of
value.
Well,
every
school
board
is
over
30
cents.
That's
like
the
state
floor,
minimum
required
level.
E
For
many
reasons.
Every
school
board
is
actually
imposing
a
tax
rate,
that's
higher
than
30
cents,
so
the
Delta,
the
difference
between
their
actual
tax
rate
that
they're
collecting
local
money
on
and
the
30
cents
that
it
goes
into
their
seek
formula
that
is
sort
of
that
is
the
net
negative
impact
that
we
would
talk
about
mostly
and
in
this
bourbon
District.
E
E
A
F
Mr
President
Mr
President
Eric.
What
I
want
to
make
sure
that
we're
getting
at
here
then,
is
with
the
30
cent,
in
essence,
being
what
we
go
to
for
the
state's
recognition
portion
of
that
the
district
would
recognize
a
total
difference
of
the
amount
of
the
assessment
times.
0.69
seek
would
only
recognize
the
amount
of
the
difference
times.
Point
three,
so
consequently
that
point
394
times
the
revision
downward
would
be
what
the
district
would
be
on
the
hook
for
is
that
correct.
E
I
believe
so,
yes,
I
think,
that's
correct!
That's
how
I
understand
this
would
work
and
I
think
that
basically,
is
the
net
negative
impact
that
we
talked
about
at
the
first
meeting.
All
those
amounts.
That's
why
there
is
that
net
negative,
because
the
seek
formula
would
help
backfill
a
little,
but
not
all
so
yes,.
E
All
right,
don't
ever
take
us
back
to
Nichols
I
hate
talking
about
nickels
I
wish.
If
I
tell
you
if
I
could
get
in
a
time
machine,
we
would
go
back
and
we
would
have
thought
of
something
different
than
nickels
to
do
for
school
facilities.
Work
way
back
then,
but
now
we're
trapped
with
it,
and
it
is
it's
always
we're
at
the
point.
E
So
again,
I'll
just
say
all
of
the
factors
on
this
seek
calculation
chart
I
talked
about
this
Wednesday
at
the
full
Appropriations
and
revenue
committee.
Again,
like
I,
said
at
the
beginning
the
importance
of
the
fair
fairness
across
districts.
How
important
it
is
that
all
property
is
fully
assessed
at
Fair
cash
value.
That's
been
the
entire
fundamental
basis
of
all
of
this
formula
from
the
beginning,
when
we
created
this
in
1990..
E
In
fact,
part
of
the
Cara
reforms
was
restating
again
in
state
law
that
ever
all
the
property
must
be
assessed
at
the
full
Fair
cash
value
that
that
was
so
important
for
support
across
the
state
for
Cara
and
roughly
the
tax
increases
in
it
part
of
that
legislation
that
same
session
the
day
before
the
legislature
passed
Cara,
they
passed
a
separate
bill
that
made
it
much.
The
penalties
on
pvas
for
not
fully
assessing
property
were
much
stiffer.
They
could
be
removed
from
office
by
the
Department
of
Revenue.
E
So
just
that's
why
I
said:
there's
always
more
restrictions
and
more
complications
about
any
property
tax
change
compared
to
other
taxes,
because
the
importance
of
that
being
the
basis
for
almost
you
see
the
Box
on
the
screen
of
seek
inputs,
I
mean
about
half
of
the
inputs
that
go
into
the
formula
tie
back
in
some
way
on
this
assessment,
the
value
of
all
this
property
and,
what's
being
collected
locally,
the
local
effort.
You
know
the
big,
the
reduction
in
state
funding,
how
the
formula
works
on
the
calculation.
E
So
you
see
we
start
with
like
the
4100
per
pupil.
You
add
on
some
money
for
how
many
kids
they
have
at
risk,
how
many
exceptional
children
they
have
and
so
forth,
you're.
Adding
all
of
this
amounts
up
and
the
state
money
going
down
to
the
districts
you're,
adding
it
up
getting
bigger
and
bigger.
Then
you
reduce
the
state
funding
based
on
that
30
Cent
local
property
tax
effort.
E
So
there
again
that
ties
back
to
to
make
sure
that
that
is
fair
for
all
districts
across
the
state
in
the
Sikh
formula
and
that
you
don't
give
districts
more
than
you're
giving
someone
else
unfairly.
It
is
so
important
that
all
the
property
is
assessed
fully.
A
few
years
ago
there
was
a
bill
proposed
that
passed
that
Exempted
I
believe
it
was
recreational
vehicles
held
in
a
Retailer's
inventory
for
sale.
E
It
added
that
one
sentence
to
the
list
of
things
that
were
exempt
from
local
Taxation
and
I.
Remember
the
fiscal
note
on
that
Bill
said
well.
How
much
is
how
much
of
that
is
there
in
Kentucky
seems
relatively
small
and
minor.
There's
not
a
lot
in
many
of
these
districts.
It
seemed
like
not
a
big
deal
but
ksba
and
other
groups
cautioned
even
then
they
said
well.
E
That
has
always
been
treated
as
a
form
of
real
property
that
was
subject
to
tax.
Just
like
your
house
and
buildings
that
you
own
and
farmland
several
years
back,
I
think
there
was
some
litigation
that
was
challenging.
Are
we
actually
assessing
that
property
property
accurately?
Is
it
paying
what
it
should
be
paying
and
the
result
of
some
of
that
was
a
formula
that
you
see
on
your
screen.
E
Maybe
the
only
thing
more
complicated
than
the
seek
formula
was
how
we
assessed
what
unmined
coal
was
worth
before
it
was
mined,
while
it
was
still
in
the
ground.
There
was
this,
and
this
has
changed
since
then,
at
the
time
for
several
years,
this
seven
Factor
formula
was
how
the
Department
of
Revenue
in
Frankfurt
centrally
assessed
the
value
of
all
the
unmined
coal
in
the
state.
You
see
what
those
seven
factors
in
that
formula.
You
multiplied
everything
together
to
get
to
what
was
the
taxable
value
this
year
and
roughly
half
the
factors
like
minable
acres?
E
Is
it
minable
at
all,
because
it's
worthless,
if
you
can't
mine
it,
as
you
were
saying,
coal
thickness,
cold
density,
some
of
those
were
trying
to
capture
how
much
coal
is
there,
and
is
it
taxable
at
all,
because
if
it's
not
minable,
it
has
no
economic
value,
it's
kind
of
worthless,
a
couple
of
the
factors
near
the
bottom
we're
trying
to
get
to
well
in
dollar
figures.
What's
it
worth
so
that
was
trying
to
capture
in
the
current
economy.
How
much
is
this
worth
for
us
to
send
a
tax
bill
just
like
where
we
assess?
E
E
Many
of
us
know
the
overall
market
for
coal,
the
industry
and
the
economic
market
for
coal
really
plummeted,
and
a
lot
of
the
folks
that
own
this
coal
under
the
ground,
I
think
protested
their
assessments
and
said
well
this
formula
it
worked
up
until
now,
but
really
suddenly,
a
lot
of
other
factors
have
suddenly
skewed
the
entire
Market.
The
coal
that
I
own
under
the
ground
is
not
worth
this
much
anymore.
It's
technically
feasible
to
mine,
like
I
could
mine
it,
but
no
one
will
buy
it.
E
E
So
when
that
kind
of
protest
came
up,
there
was
a
new
look
at
it:
a
new
assessment,
the
Department
of
Revenue,
which
I
will
not
speak
for
them
and
I
know
about
this
much
about
what
actually
happened,
but
they
kind
of
came
out
with
new
assessments
and
they
were
dramatically
reduced.
Just
hugely
substantially
cut
the
value
of
what
this
unmanned
coal
was
worth
for,
tax
like
all
at
once
overnight.
E
Basically,
what
you
see
here
this
because,
as
we
all
admit,
usually
the
single
largest
item
on
a
property
tax
bill
is
the
local
school
district
and
then
probably
after
that,
the
Fiscal
Court
and
health
departments
and
Soil
and
Water
and
other
things
are
smaller
amounts.
And
so,
when
that
happened
and
the
tax
bills
went
out
and
the
assessments
went
out,
the
school
districts
were
hit
especially
hard,
along
with
the
fiscal
courts
in
some
of
the
coal
counties
in
Western
Kentucky,
but
especially
in
Eastern
Kentucky,
and
so
overnight.
E
Ksba
heard
immediately
from
school
board
members
and
superintendents
and
finance
officers.
True
lack
of
panic,
I
mean
I.
Remember
at
the
time.
I
actually
worked
on
a
r
staff
here
at
lrc.
At
the
time
when
this
happened,
a
lot
of
superintendents
called
their
legislators,
so
you
all
called
staff
at
the
time
and
said
we
almost
can't
believe
what's
happened,
what
are
we
going
to
do
like?
How
are
we
going
to
backfill
this
money?
For
some
districts?
It
was
like
half
of
their
total
local
revenue
and
half
of
their
budget.
It
was
this
huge
sudden
hit.
E
E
It
was
like
in
the
middle
of
the
year
they
had,
as
you
said
earlier,
they
had
already
estimated
a
lot
of
things.
You
estimate
one
or
two
years
out
on
some
of
this
school
budgeting
and
seeking
Revenue
numbers.
It
was
truly
a
crisis,
and
then
you
see
there
not
County.
These
are
just
a
few
that
I
had
readily
available,
not
County
Schools
unmined
coal
tax
revenues
from
2013
to
2018..
E
E
They
shouldered
this
when
it
hit
Pike
County,
largely
through
like
backfilling
through
their
contingency
at
the
time,
and
you
can
see
what
it
did
to
that
falling
from
7
million
down
to
300,
000
or
so,
and
so
part
of
the
response
to
that
at
the
time
which
again
remember
when
this
happened
legislatively.
You
did
not
like
repeal
this
tax
or
exempt
this
tax
of
this
property
from
taxation.
The
change
was
truly
just.
It
was
not
worth
as
much
suddenly
one
of
the
ways
that
we
that
you,
the
general
assembly.
E
Even
though
I
could
talk
all
day,
you
don't
want
to
hear
me
talk
about
this
all
day.
It's
mind-numbing
this
chart
is
looking
at
Leslie
County,
the
Leslie
County
Board
of
Ed
local
tax
revenues
in
the
last
meeting
of
this
task
force,
a
couple
of
folks,
I.
Think
a
couple
of
members
and
some
other
folks
trying
to
wrap
your
heads
around
the
compensating
tax
rate
and
what
that
means
and
the
tax
rates
that
school
boards
and
other
localities
can
set.
E
It
when,
as
you
can
see,
I
mean
you
can
that
tells
the
picture.
It
was
a
very
consistent
amount
that
was
about
half
of
their
local
tax
collections
about
half
of
what
they
had
worth
anything
taxable.
There
was
the
sun
mined
coal
and
it
went
down
so
much
that
we
call
I
mean
I
speak
in
terms
of
it
was
almost
effectively
repealing
it.
It
went
down
so
much
so
suddenly
and
so
the
orange
amount
between
16
and
17
dropped,
and
so
for
them.
E
The
Leslie
County
School
Board
that
year
legally
technically
could
have
set
the
compensating
tax
rate,
and
you
would
have
thought
they'll.
The
the
amount
in
Blue
on
all
the
other
property
will
just
increase
and
they'll
get
about
the
same
amount
of
money
that
they
used
to
get
from
the
amount
in
Orange,
but
practically
speaking,
financially.
E
You
get
one
bill
to
the
county
sheriff
at
once,
and
you
kind
of
just
pay
all
of
it
or
you
don't
a
lot
of
folks,
probably
just
would
not
have
paid
at
all
and
they
would
not
have
really
been
able
to
backfill
because
it
was
so
much
it
would
have
like
doubled
everyone
else's
now
again.
This
is
an
example,
a
comparison
to
the
kind
of
situation.
The
kind
of
thing
we're
talking
about
I,
don't
believe
that
any
district
has
like
50
percent
any
of
these
bourbon
districts.
E
It's
this
much
of
their
local
budget
and
revenue
as
it
is
in
this
example.
But
this
is
trying
to
explain
how
the
compensate
compensating
tax
rate
works
and
it
would
work
the
same
way
if
any
sizable
amount
of
property
was
reduced,
this
much
or
Exempted
or
repealed,
so
for
them
that
year,
I
mean
I.
Remember
once
I
was
just
speaking
to
a
superintendent,
not
even
at
ksba.
E
In
my
prior
job,
a
superintendent
called
the
day
that
a
man
named
Jay
Ritter
at
the
department
of
Ed,
sent
that
school
district,
all
their
rate
calculations,
and
he
called
me-
and
he
said,
I'm
just
looking
for
help
from
anybody,
our
compensating
rates
double,
and
we
can't
do
that.
Nobody
will
pay
it
like
what
in
the
world
are
we
going
to
do
which
again
fed
into
the
legislative
response?
We
were
grateful
for
to
give
them
kind
of
maybe
a
couple
of
years
to
phase
into
something.
E
This
is
my
last
slide.
This
slide
explains
kind
of
that
phasing,
in
that
the
compensating
rate
can
sort
of
how
that
can
work.
Another
of
the
counties
hit
with
this
was
not
County.
The
not
County
Board
of
education's
general
fund,
real
property
tax
rate
in
1718
was
50.4
cents
per
hundred
dollars.
Now
that
was
already
the
first
time
they
set
a
rate
after
this
change
hit,
and
so
that
was
the
rate
they
set
in
the
year
after
they
said
well,
like
our
budget,
you
know,
has
been
substantially
dropped.
E
We've
lost
most
of
the
sun
mined
coal
assessment
and
so
seek
we'll
get
some
seek.
Increase
for
that,
but
still
not
enough,
as
we
discussed
earlier
to
fully
backfill
this
and
so
they're
compensating
tax
rate
that
year
was
much
higher
than
50
cents
and
they
sort
of
said
well
practically.
We
probably
won't
be
able
to
collect
that.
That's
such
an
increase
for
everyone
else
on
their
house.
They
set
this
rate
and
then
the
following
year
they
had
the
life
raft.
E
They
got
about
a
million
dollars,
I
think
in
the
18
budget
to
kind
of
help
fill
this,
then
that
went
away
and
in
1819
the
first
year
that
they
are
totally
under
this
new
assessment.
They're
sit
they're
looking
at
their
tax
rate
options,
there
was
no
ongoing
State
sort
of
special
money.
They
set
the
rate
at
58
cents
per
hundred
dollars.
E
New
Normal
level
was
still
a
15
rate
increase
for
each
individual
taxpayer
on
their
bill,
and
so
this
kind
of
explains
that
if
any
change
is
big
enough
in
a
assessment
base
and
the
rates,
it
does
very
much
matter
like
who
the
money
comes
from
it
matters
of.
Will
the
other
people
be
able
to
pay
it
practically.
Will
you
have
enough
of
a
stable
tax
base
on
everything
else,
and
will
the
tax
increase
on
everyone
else
be
something
that
is
just
practically
feasible?
E
That's
just
one
snapshot
of
what
it
looked
like
there
and
again.
So
then,
you
go
back
to
the
bourbon
districts
that
were
shaded
in
blue.
E
This
is
exactly
the
kind
of
thing
they'd
look
at
of
well,
even
our
compensating
rate
would
be
a
substantial
increase.
Is
that
fair?
Is
that
feasible?
If
we
just
set
that,
will
some
people
actually
be
able
to
pay
it?
We
may
end
up
collecting.
We
may
end
up
not
collecting
about
the
same
amount
as
well
as
the
nickel
calculations
we
talked
about.
How
is
that
going
to
change
the
amount
they're
bringing
in
for
the
debt
service
for
projects
that
may
have
already
been
finished?
E
E
The
very
last
thing
I'll
mention
before
I,
open
it
for
questions
or
move
to
the
next
part
of
the
agenda
is
as
part
of
these
discussions,
a
lot
of
us
have
talked
about
hold
harmless
and
we
use
that
term.
I've
met
with
several
members
of
the
task
force
and
talked
about.
Well,
you
may
or
may
not
pass
something
and
whatever
you
do,
we
don't
want
to
harm
localities.
We'll
do
some
something
that's
holding
you
harmless
or
hold
harmless.
I
think
that
term
there
is
no
one
definition
of
what
that
means
anywhere
in
a
statute.
E
In
some
ways
that
could
mean
different
things
to
different
people.
Some
people
have
suggested
well,
we'll
just
take
kind
of
a
one-time
snapshot
in
time
of
we'll
calculate
all
of
this.
The
net
negative
impact
and
we'll
just
give
you
that
amount
of
money
from
the
state
permanently
or
for
Fears
or
something
and
that'll
like
hold
you
harmless.
So
you
won't
see
a
net
negative
impact.
E
Also,
when
you
compare
those
first,
two
slides,
if
you
just
take
a
snapshot
of
who
is
collecting
this
tax
now
today,
you
may
not
capture
growth
for
those
districts
into
the
future,
and
you
may
not
capture
the
growth
of
the
industry
moving
into
other
districts.
So
five
years
from
now,
a
warehouse
might
open
and
a
school
district
might
not
get
a
benefit
from
that
in
their
local
revenues,
and
they
might
not
be
in
this
the
whole
harmless
group
getting
State
funding
and
then
full
circle.
If
anything
like
that
were
to
happen.
E
The
ultimate
fairness
of
the
whole
purpose
of
seek
the
formula
of
seek
and
what
seek
is
the
whole
purpose
of
it
is
that
you
give
more
or
less
to
different
districts
based
on
the
measurement
that
we
have
picked
forever:
the
proxy
of
local
wealth
and
local
economic
activity
being
property
assessments
and
the
value
it
is
always
important
to
really
be
carefully
considerate
of
any
exemption.
You
do
big
or
small
of
any
kind
of
property,
and
is
that
going
to
skew
it?
Is
it
something
that's
in
one
part
of
the
state
but
not
another?
E
You'll
hear
from
people
not
just
like
school
board
members
but
you'll
hear
from
the
taxpayers
that
yell
at
the
school
board
first
and
then
they
come
yelling
for
everybody
else.
If
there's
any
sense
of
the
district
next
door
got
something
we
didn't
get
and
something's
not
fair.
So
that's
just
a
big
thing
that
again
it's
Unique
to
schools,
even
different
than
counties
and
cities
and
other
folks.
That's
a
part
of
this
issue.
A
No,
that
I
think
it's
very
good
that
you
have
gone
through
this,
but
I
want
to
just
take
a
minute
or
two
then
I've
got
a
couple
of
members
who
have
questions.
A
The
Dynamics
in
the
eastern
part
of
the
state,
I
think
I,
know
fairly
well
and
through
that
I
think
the
realities
were
that
minerals,
weren't,
minable
or
merchantable,
because
we
went
from
300
million
dollars
in
Severance
tax
receipts
to
25
million
dollars
in
Severance
tax
receipts,
basically
and
I.
Think
everyone
in
the
room,
that's
affiliated
with
government,
knows
that
we're
as
a
nation
any
world,
apparently
attempting
to
go
away
from
carbon-based
fuels,
which
means
even
less
value
to
coal,
oil
and
gas.
A
Out
of
that
which
I
want
to
go
through.
This
expansion
is
a
good
thing
according
to
you,
because
that
creates
increased
property
values
so
from
what
happened
in
2014
and
15
in
the
bourbon
industry
that
Barrel
tax
that
was
placed
on
an
additional
new
6
million
barrels
that
have
come
into
existence
has
helped
those
counties
where
they
have
come
into
existence
so
to
not
grow
actually
has
multiple
economic
impacts
in
other
areas,
which
then
I'll
go
back.
When
you
lose
property
value,
you
lose
jobs.
A
You
lose
general
property
values
because
most
people
can't
afford
to
pay
the
property
taxes,
and
when
you
walk
into
the
Leslie
County
Courthouse,
which
I
have
done
many
times
in
32
years,
you
see
the
majority
of
the
docket
being
taxis
versus
Robert
Stivers
to
collect
where
they
have
purchased
all
the
delinquent
tax
bills.
That
I
have
failed
to
pay
I'm
going
to
use
I.
A
Don't
I
pay
my
taxes
but
I'm
using
that,
so
nobody
else
I
don't
want
to
pick
somebody
else,
because
I've
done
that
before
and
then
somebody
complained
to
me
that
I
use
them
yeah
yeah.
So
you
know
the
Dynamics
are
there,
so
you
want
good
economic
Dynamics
for
business
and
industry
to
grow.
If
you
want
to
see
what
happens
when
you
don't
go
to
Leslie
County,
because
they're
now
at
10
000
people
when
15
20
years
ago,
they
were
15
or
17
000
people
childbearing
years
people
who
work
are
virtually
the
same
universe.
A
They
move
to
Scott
County
and
live
with
Damon
there
and
work
at
Toyota
and
that's
kind
of
the
circumstances.
So
people
need
to
I
want
people
to
understand,
yeah
we're
looking
at
all
the
economic
Dynamics
and
there's
much
more
to
this
than
just
what
you
spoke
of
in
that
because
I'm
very
familiar
and
I
know
Senator
McDaniel
I
can't
remember
what
we
put
in
the
budget.
Those
lifelines
I
think
there
was
18
school
systems.
A
F
You
Mr
President
Eric.
Could
you
go
back
to
the
start
of
the
nickel
explanation
just
start
over
for
us
no
I'm
kidding
no
sincerely
I
actually
was
going
to
kind
of
echo.
What
president
Stivers
alluded
to
there,
which
is
in
a
lot
of
in
the
case
in
the
East
I,
think
the
economic
dynamics
that
drove
this
were
largely
in
addition
to
the
unigned
sources.
You
also
had
an
outflow
of
population
and
consequently
you
could
look
at
a
corresponding
reduction
of
student
population.
F
I,
don't
know
if
the
districts
look
at
looked
at
trying
necessarily
to
right
size
or
if
they
could
based
off
of
geography
Etc,
but
but
there
was
necessarily
that
the
flip
side
of
what
we're
talking
about
here
is.
You
should
necessarily
have
increasing
property
values
and
an
increase
of
population
and
economic
base
occurring
in
the
areas
because
of
the
nature
of
this
activity
and
I.
Think
the
president
and
I
are
touching
on
playing
on
the
same
string
there
I
just
didn't
know
if
you
had
any
particular
brief
comments
on
that.
E
Yeah
I
think
that's
well
yeah.
That's
true!
So,
like
I
said
in
the
in
the
way,
in
the
areas
where
this
is
expanding,
that's
also
some
of
the
areas
along
especially
along
some
of
the
interstates,
where
this
population
is
growing
and
expanding,
as
you
said,
and
other
things
are
growing.
So
that's.
Why
really
it's
difficult
to
to
the
point
about,
like
a
whole,
harmless
snapshot?
Well,
it's
difficult
to
even
do
the
things
we're
trying
to
do
here
of
taking
this
snapshot
to
say
if
everything
else
stayed
the
same.
E
What
would
the
impact
be
of
this
one
change,
because
the
Ada
numbers
in
the
seek
input
chart
probably
would
grow
unless
there's
some
other
thing
happening.
The
per
pupil
assessment
then
might
also
change
that
the
total
assessment
Falls,
perhaps
if
everything
else,
stays
the
same
and
properties
repealed
or
Exempted,
but
then
on
a
Perpetual
basis
that
might
change
if
population
is
growing,
so
a
lot
of
things
will
play
into
trying
to
estimate
what
would
the
exact
thing
be
that
we're
trying
to
replace
to
your
point
Senator
McDaniel
and
Senator
Stivers?
E
Another
thing
that's
sort
of
similar
for
us
that
we've
already
discovered
that
we
don't
need
to
re-plow
is
irbs
and
pilot
agreements
that
we
talked
about
in
the
last
meeting.
I
looked
at
one
of
them
recently
yesterday,
one
IRB
for
a
Distillery
expansion,
Warehouse
expansion
in
one
of
the
bourbon
districts
has
a
pilot
from
several
years
ago,
and
that
was
captured
in
the
the
full
write-up
of
that
agreement
that
the
school
board
had
in
front
of
them
to
approve
or
not,
which
they
approved
was
exactly
we
were
talking
about.
E
It
was
like
well,
here's
the
assess,
here's
what
we
estimate
for
the
next
30
years.
If
this
project
happens,
we
will
probably
see
this
much
increased
property
tax.
This
much
increase
property
tax
on
the
liquid.
That's
going
to
be
a
part
of
this,
and
so
here's
what
we
lose
from
this
and
here's
the
pilot.
But
then
this
is
what
we'll
grow
in
all
of
that.
E
As
best
you
can
estimate
all
of
the
growth
and
student
population
and
all
the
assessments
is
a
part
of
what
they
do
look
at
when
they
look
at
these
things,
but
it
is
difficult.
I
mean
it's
crazy
to
think.
If
everything
on
this
chart
stays
the
same,
let's
change
one
thing
and
try
to
guess
what
will
happen.
I
mean
that's
all
you
can
do,
but
nothing
ever
stays
the
same.
Every
single
number
on
all
of
these
charts
changes
every
single
year
for
every
District
like
three
times
a
year.
G
Foreign,
thank
you.
Mr
President
Eric
on
I
agree
with
you
on
the
seek
formula
and
the
Nichols.
It's
all
I
tell
people
all
the
time
is
clear
as
mud,
it's
very
difficult
to
comprehend
at
times
under
the
I
guess,
the
general
assembly
appropriated
this
year,
forty
one
hundred
dollars
per
student
seek
formula
and
I
I,
think
I
saw
one
of
my
schools
gets
and
as
the
formula
goes
and
and
this
money
is
calculated,
the
avalorium
tax
I
think
I
saw
one
of
my
school
districts
with
about
twenty.
G
Nine
hundred
dollars
is
what
they
got
are
three
thousand
so
about
a
thousand
dollars
of
people
less
because
of
the
local
resources.
G
And
we
talk
about
back
feeling,
so
when,
if
the
avalorium
tax
went
away,
then
somebody
I
guess
the
state
has
to
backfill
that
formula
to
for
to
get
those
schools
that
are
now
getting
2
900
to.
If
that's,
if
that's
part
of
the
reason,
it's
not
going
to
be
the
entire
Eleven
Hundred
twelve
hundred
dollars,
but
it'd
be
a
big
part
of
it.
Do
we
know,
have
you
ever
done
any?
E
Yes,
I
think
the
best
way
to
speak
to
that
or
answer
that
is
again
if
nothing
changed,
except
that
and
then
you
were
not
going
to
rerun
the
seed
calculation
and
that's
really
what
the
the
KDA
analysis
The
Distillery
analysis
in
the
first
meeting
when
they
looked
at
that
was
doing,
and
it's
kind
of
had
most
districts
have
this
net
negative
impact.
So
that's
really
kind
of
what
that
was
doing.
E
So
you
could
I
mean
KDE
could
sit
down
and
run
that
again.
You
know
for
the
current
year
and
all
the
current
numbers
I
think
there
again
this.
Let
me
bring
it
up
again.
What
you
would
really
be
looking
at
is
for
the
district.
You
gave
the
example
of
where
we
start
with
4100,
but
then,
at
the
end
of
the
day,
the
top
is
4100
at
the
bottom
of
the
page.
They
only
get
maybe
like
3
000,
actually
is
what
they
received
from
Frankfurt
per
pupil.
E
That
Gap
a
big
part
of
what
is
driving.
That
Gap
is
then
looking
at
what
is
their
actual
local
tax
collections
in
their
local
rate,
which
is
one
of
the
other
things
that
can
change
ever
does
change
every
year
would
especially
change
if
something
like
this
happened,
because,
like
the
compensating
rate
thing,
we
talked
about
so
calculating
that,
of
course
you
can
rerun
the
seat
calculations,
assuming
everything
stays
equal
I
mean
it
would
be,
it
would
be
sizable.
E
It's
all
relative
I
mean
it's
a
lot
of
money
for
the
state
to
cover
all
of
this,
but
that's
also.
That
means
it's
the
same
amount
of
money
for
all
these
districts.
If
they
were
to
lose
it
and
need
it
filled
and
to
I
mean
president
Cyrus
was
exactly
right.
When
you
drive
through
any
community
and
there's
new
school
buildings,
they
look
really
great
I
mean
if
you're
from
out
of
town
you're
driving
through
you
either
think
wow.
They
really
put
a
lot
into
their
schools
or
wow.
G
Thank
you
not
it'd,
be
different
for,
like
I,
think
you're
using
Marion
County
numbers
there.
G
69.4
cents
and
you're
only
going
to
refill
backfill
it
for
30
cents
on
the
on
the
seek
form,
I
think
is
what
you're
seeing
so
anyway.
It's
be
interesting
to
see
what
that
number
is
and
like
I
said,
maybe
maybe
they
did
explain
that
number
in
the
beginning,
but
not
as
thorough
as
as
as
you
have
and.
E
A
Any
other
members
seeking
recognition
for
the
purpose
of
answering
questions
all
right,
Eric.
Thank
you
appreciate
the
presentation,
I'm
sure
a
lot
of
people
who
don't
deal
with
the
Nickels
every
day,
the
equalization
nickel.
The
of
what
is
there
like
four
different
nickels.
We
have
to
deal
with.
E
A
A
Quick,
none
of
us
that
have
dealt
with
the
nickels
for
very
long
laugh
about
nickels.
Thank
you,
Eric
next
Eric
Gregory,
Gregory,
Tim,
ifler
and
Dr
Coombs.
A
Dr
Coombs-
you
have
not
been
here
before
in
this
task
force.
The
other
two
gentlemen
have
been
here
so
I'm
not
expecting
too
much
from
them
in
the
way
of
additional
information,
but
again
introduce
yourselves
and
I
wanted
to
talk
a
little
bit
about
the
economics
and
some
questions
that
have
been
raised
over
the
past.
Several
meetings.
H
There
we
go
yes,
thank
you,
Senator
cybers
and
my
apologies
again
for
missing
the
last
meeting.
As
Senator
Hayden
pointed
out,
I
did
have
covet,
but
I
appreciate
all
the
well
wishes
that
came
in
and
I
am
hopefully
back
to
back
to
fighting
condition
and
thank
you
to
this
task
force.
As
Senator
Stivers
stated.
H
We
agree
that
and
we
applaud
y'all
for
creating
this
task
force
and
undertaking
this
fact-finding
mission
to
bring
all
the
parties
together
and
hear
all
the
input
in
an
open
and
objective
way
and
if
and
we
know
understand,
that's
a
big
if,
if
Solutions
are
to
be
examined,
I
think
it's
great
to
do
it
as
a
group
here,
then
us
just
working
individually.
So
thank
you
for
the
to
this
task
force
and
and
really
quickly
before
I
turn
over
to
Tim
eifler.
H
Here
who's,
an
expert
in
seek
formula
and
taxes,
and
things
like
that
I
think
Mr
Eric
for
me
really
hit
on
some
of
the
the
themes
that
we're
talking
about
here
today.
I
was
here
in
1990
when
care
was
passed
and
I'm,
not
sure
if
we
did
it
all
over
again,
we'd
tie
education,
funding
to
any
industry,
that's
subject
to
Market
forces
and
and
economic
whims.
H
The
bourbon
industry
is
an
industry
that
is
used
to
forecasting
5
10
15
years
out,
and
we
are
under
the
same
external
pressures
as
any
industry
right
now
in
the
terms
of
supply
chain
and
Workforce
and
glass
shortage
and
Barrel
shortage
and
everything
else.
H
But
one
thing
is
clear
to
us,
and
we've
stated
this
here:
that
competition
is
real
and
other
states
understand
that
bourbon
isn't
just
a
drink,
it's
Economic,
Development
and
Tourism
and
tax
revenue
and
jobs,
and
they
want
what
Kentucky
has
and
right
now
states
are
growing
faster
in
the
distilling
Community
than
Kentucky
you've
heard
us
mentioned.
There
are
2300
distilleries
all
across
the
country.
H
Now
in
all
50
states
in
Kentucky
has
less
than
100
of
those,
and
one
of
the
big
reasons
is
the
the
tax
structure,
the
barrel
tax
on
Spirits,
which
no
other
place
in
the
world
taxes.
H
So
we
think
it's
right
and
properly
to
be
looking
at
this,
because
there
is
going
to
come
a
day
and
hopefully
not
in
my
lifetime,
where
this
Brown
water
isn't
as
popular
as
it
is
right
now,
this
year
alone,
their
stories
that
just
came
out
that
tequila
has
grained
70
on
sales
on
American,
whiskey
and
vodka,
and
this
year,
for
the
first
time
ever,
Americans
will
be
buying
more
tequila
spending
more
money
on
tequila
and
agave-based
drinks
than
whiskey.
So
is
that
the
start
of
a
trend?
H
We
don't
know,
but
we're
closely
watching
this
to
see
what
happens
to
the
future
of
our
industry.
So
with
that
I
was
turned
over
real,
quick
to
Tim
eifler
here
for
any
comments
or
any
questions
on
some
of
the
issues
that
he
has
talked
about
before.
Let.
A
A
That's
based
on
projection
and
as
we've
looked
at
the
charts,
you
know
nothing
is
sold
within
the
first
two
years
and
then,
as
you
get
to
that
six
to
eight
year,
point
that
which
is
produced
in
2022
will
get
sold.
The
majority
of
it
will
get
sold
because
that's
the
target
years
for
considering
Prime
product
and
so
you'll
see
that
so,
let's
say
in
23,
you
have
Market
projections
that
the
bourbon
industry
is
going
to
start
declining
because
various
reasons
take
take
whatever
you
want
to
plug
into
the
scenario.
A
It's
Vodka,
it's
tequila,
it's
rum,
it's
something
else!
It
may
be
that
we
become
you
know
back
to
Prohibition
years.
You
just
made
my
heart
jump.
I,
know
sorry,
but
there
there's
just
a
changing
buying
patterns.
That's
correct!
Yes,
sir.
You
know
that
that
happens
on
on
occasions
that
you
have
changes
in
buying
patterns
and
you
all
project
that
well
wait.
A
minute
we're
going
to
cut
back
we're
not
going
to
be
building
Rick
houses,
actually
we're
not
even
going
to
fill
Rick
houses
I.E.
Let's
compare
it
to
the
coal
industry.
H
You
just
teed
up
Dr,
Coombs,
I,
think
perfectly
I
didn't
know
what
he
was
going
to
say.
So,
yes,
no,
that's
something
that
Dr
Coombs
has
looked
at,
so
we
can
go
straight
to
Doctor
Who.
This
Tim
is
there
anything
particular
I
will
say
that
Eric's
numbers
that
he
suggested
Tim
again
as
an
expert
in
this,
and
he
had
done
the
comp,
the
calculations
that
y'all
saw
earlier
in
the
year
and
they
they
lined
up
pretty
well
correct
him
correct.
H
So
we're
we're
on
the
same
page
on
that
so
Dr
Coombs
I'll,
just
turn
it
over
to
you
sure
all
right,
I,
don't
mind
doing
it.
I
Good
morning,
everyone
so
I'm,
Paul,
Coombs
retired
economics,
professor
from
University
of
Louisville
and
I've,
been
doing
economic
studies
of
the
distilling
industry
since
2009,
roughly
so
for
13
14
years
every
two
years,
we've
done
updates
of
our
economic
impact
study
and
it's
just
gotten
deeper
and
deeper
and
I've
become
more
educated
about
the
supply
chain
and
the
tax
structure
and
the
modeling
issues,
and
all
of
those
reports
are
on
kda's
website.
I
If
you
want
to
go
there
and
I've
been
watching
these
task
force,
hearings
on
YouTube,
like
lots
of
other
people,
very
fascinating
and
making
notes,
and
so
today,
I'm
just
going
to
present
some
ideas
that
I
had
as
as
I
listened
to
girls
discussions
over
the
last
few
months.
We've
also
done
some
projections
of
phasing
out
Etc
and
Senator
staubers
your
mentioned
about
the
two-year
lag
and
withdrawal
rates.
We
have
those
calculations
ready
to
go.
If
you
want
to
hear
about
that.
I
So
let
me
just
take
you
through
a
few
ideas
that
I
had
in
response
to
what
has
come
up
so
far.
You
mentioned
the
current
inventory:
there's
not
only
the
current
inventory,
but
also
you
can
see
the
exponential
growth
in
the
inventory
beginning
in
the
early
2010s
we're
now
11.4
million
barrels
at
the
end
of
21.
I
This
is
from
our
last
study
and
you
don't
need
to
look
at
the
details
there,
but
basically,
we've
tried
to
calculate
all
the
taxes
paid
on
the
production
of
distilled
Spirits
in
in
the
state
over
the
last
decade
and
let's
just
focus
on
the
growth
over
the
last
decade,
and
you
can
see
it's
gone
from:
68
million
to
167
million
over
that
decade
in
state
and
local
taxes
paid
due
to
the
production
of
distilled
Spirits,
which
is
144
growth.
Obviously
it's
continued
in
21.
I
We
just
haven't
done
another
study
in
the
last
year
this
we
have
never
gone
into
the
further
weeds
to
look
at
these
other
taxes,
utility
taxes
for
the
schools
which
have
not
been
mentioned
so
far,
which
are
significant,
I'm
sure
for
distilleries
insurance
premium
taxes.
Some
do
some,
don't
corporate
state
income,
taxes,
room
taxes
and
restaurant
taxes,
another
one
I
didn't
add
to
this
is
the
benefit
to
agriculture.
The
last
time
we
did
our
study.
I
We
found
that
Kentucky
distillers
bought
about
I
think
it
was
about
12
12
and
a
half
million
bushels
of
corn
Kentucky
grown
corn.
So
just
to
give
you
a
feel
for
the
the
impacts.
Here's
the
revenue
history
for
the
Aging
Barrel
tax-
you
can
see
the
state
gets
a
very
small
piece
by
far
the
largest
beneficiary
or
the
school
systems
and
then
the
other
local
jurisdictions,
as
were
mentioned,
the
County
Fiscal
courts,
fire
departments,
libraries,
Health
departments,
soil
conservation,
but
schools
are
the
biggest
with
26
million.
I
I
All
of
this
discussion
to
an
economist
reminded
me
of
the
famous
Laffer
Curve
and
the
industry
Eric
just.
A
Something
that's
laughable,
but
it
is
Art
laugher
very
well
and
well-known
Economist
who
lives
in
Nashville.
Now
has
a
farm
in
burksville
and
I
think
was
President
Reagan's,
chief
economic
advisor
so
and
he
created
the
laugher
Curve.
I
Our
share
of
everything
really
the
number
of
licensed
distilleries
employment,
payrolls
have
held
up
pretty
well
employment's
been
falling.
Our
share
nationally
has
been
falling,
so
we
could
be
and
what
the
Laffer
Curve
tells
you
is.
If
you're
on
this
downside
of
the
Curve,
then
lowering
taxes
like
this
actually
gets
you
more
tax
revenues.
I
So
obviously
this
is
very
complicated
in
practice,
because
there's
so
many
taxes
that
distilling
pays
but
conceptually
I
think
that's
the
point
you're
making
that's
what
it
sounds
like
to
an
economist
that
if
you
could
take
some,
give
us
some
tax
relief,
because
we
do
stand
out
as
a
very
high
tax
place
for
distilling.
We
could
actually
grow
even
faster,
or
at
least
faster
than
we
would
have
and
generate
more
tax
revenues
and.
I
A
With
that,
you
look
for
people,
and
you
see
this
primarily
in
the
higher
tax
states,
that
businesses
are
moving
out
and
going
to
lower
tax
states,
primarily
on
the
consumption,
Side
sales
tax
side
versus
the
production
side,
which
is
your
income
tax
side,
and
that's
actually,
where
you
are
seeing
the
growth.
A
I
The
concept
and-
and
it's
it's
certainly
happening
and
Kentucky,
thankfully,
has
started
Shifting
the
direction
you
just
pointed
out,
which
is
lowering
our
income
tax
burden
and
raising
the
consumption
taxes,
which
most
economists
would
agree.
That's
the
direction
to
move
as
far
as
economic
growth,
Senator.
F
Question
yep:
thank
you.
Mr
President,
Dr,
Combs
good,
to
see
you
again,
I
think
the
last
time
we
saw
each
other
actually
was.
We
spent
a
Saturday
with
art
Laffer
talking
about
tax
policy,
help
me
to
understand
because
you
bring
his
curve
in
either
I'm,
not
understanding
or
we're.
Looking
at
two
different
theories
here,
the
x-axis
in
this
is
is
related
to
the
tax
rate,
not
necessarily
the
net
tax
dollars
collected
right,
I've
not
heard
in
previous
testimony
from
the
industry.
That
necessarily
the
rate
is
the
problem.
F
So
much
as
the
accumulation
of
the
credits
am
I
incorrect
in
that,
because
the
curve
necessarily
reflects
tax
rates,
not
tax
receipts,
and
it
appears
so
far.
What
I've
heard
is
problem
with
receipts.
Not
rates
am
I
missing
the
point:
is
there
a
rate
problem
as
well
that
the
local
taxes
are
going
up
more
than
you
guys
necessarily
care
to
bear,
or
is
it?
Is
this
an
actual
receipts
problem.
I
Obviously,
but
I
think
the
concept
is
that
if
you
look
at
all
the
taxes
that
the
industry
pays
and
divide
it
by
their
economic
activity,
that's
an
effective
tax
rate
that
the
Aging
Barrel
piece
really
stands
out,
because
no
other
place
does
it
right,
and
so
by
taking
that
tax
rate
to
zero,
which
is
the
proposal,
you
would
lower
the
overall
tax
burden
on
the
industry,
lower
their
effective
tax
rate
across
all
tax
categories,
because
you
eliminate
one
of
them,
which
then
gives
them
more
incentive
to
expand.
F
Sure,
I
guess
the
the
utilization
of
this
particular
model,
though
raise
the
question
in
my
mind.
Is
there
an
issue
that
you
guys
feel
like
local
taxes
are
being
unjust
or
local
taxes
are
being
raised,
the
actual
rate,
not
not
the
dollars
that
you're
paying
out,
but
is
the
rate
being
raised
by
the
local
governments,
the
local
school
boards,
local
fire
districts,
to
a
point?
Well,
let
me
finish
my
question.
Please
just
real
quick
in
the
slight
answers.
F
It
that's
great,
but
I've
heard
the
conversation
more
is
about
total
dollars
being
paid,
not
necessarily
about
a
rate
issue
and
I
want
to
understand.
If
we
have
an
issue,
that's
not
been
addressed
yet
do
we
need
to
have
some
people
come
address
that
separately,
I!
Guess
that's
more!
My
question
here,
I
guess
probably
more
of
an
industry
question.
F
I
I
So
over
the
last
month,
or
so,
I've
tried
to
roll
up
the
actual
County
revenues
and
some
of
the
core
bourbon
distilling
places
and
look
at
distilling
share
of
the
total
local
tax
contribution,
including
the
schools
and
I've,
got
a
couple
of
examples.
It
gets
Messier
when
you
get
into
some
of
the
other
counties,
so
I
picked
on
two
that
had
smaller
population,
where
it's
more
easy
to
see.
I'll
just
give
you
the
punch
line,
because
you
know
we
only
have
a
few
minutes
here.
I
If
you
look
at
Marion
County
best
I
can
tell
the
distilling.
Industry
has
raised
really
quadruples
its
share
of
the
revenues
to
the
Fiscal
Court
over
the
last
decade.
If
you
look
at
the
school
system,
it's
almost
tripled
its
contribution
to
the
school
system,
so
definitely
in
Marion
County's
best
I
can
tell,
which
is
obviously
a
core
to
Sterling.
County
distilling
over
the
last
decade
has
become
a
much
bigger
part
of
their
tax
base.
I
If
you
go
to
Anderson
County,
which
is
another
less
populated
than
say,
Bullitt
County
or
Nelson
County.
It's.
It's
also
pretty
clear
here,
gone
from
about
seven
percent,
to
13
of
the
fiscal
Court's
revenues
and
for
the
school
system
from
six
percent
up
to
about
13
percent.
So
let
me
get
to
Senator
McDaniel's
question.
I
In
the
case
of
real
estate,
I
noticed
that
several
of
the
counties
have
very
low
real
estate
property
taxes
rates
right,
you
can
see
Jefferson
as
a
a
benchmark
or
the
state
is
a
benchmark
below
those
three
real
estate
tax
rates
there
for
bullet
Marion
and
Woodford
are
dramatically
lower
than
the
real
estate
tax
rates
in
Jefferson
or
the
state
and
and
and
the
the
Baseline
has
not
changed.
So
there
is
an
indication
you
know:
I'm
not
claiming
cause
and
effect
I'm,
just
as
I
said
at
the
beginning.
I
These
are
some
things
to
consider
that
I'm
noticing
and
listening
to
your
conversation
that
caused
me
to
check
things
now
why
these
Counties
have
been
able
to
lower
their
tangible
personal
property
tax
rates.
I'm.
Not
absolutely
sure
one
possibility
is
it's
because
distilling
has
caused
so
much
growth
in
the
tax
base
that
they've
been
able
to
lower
the
rates
on
everybody.
I
It's
a
question
more
than
it
is
a
conclusion
and
I'll
just
mention
here
at
the
end.
Another
factor
that
we've
not
considered
is
the
growth
in
the
hospitality
industry.
I
Most
of
the
tourism
websites
in
the
region
prominently
feature
distilling
tours
The,
Bourbon,
Trail
Etc,
and
they
are
seeing
strong
growth
in
their
hotel
rooms
in
their
restaurant
sales
and
also
tourism
jobs.
So
I
took
a
look
at
the
hospitality
industry,
employment
in
six
core
counties
in
Bullitt,
Franklin,
Marion,
Nelson
and
Woodford
and
broke
the
last.
I
What
20
years
up
into
two
halves?
I
stopped
it
before
covid,
because
everything
fell
off
the
cliff
in
2020.
But
if
you
divide
that
period
in
two,
you
can
see
that
before
the
bourbon
boom,
this
core
area
was
adding
employment
and
Hospitality
at
the
same
rate
as
the
rest
of
the
state,
but
in
the
last
decade
dramatically
higher
growth
and
it
lines
up
very
well
with
this
we're
up
to
about
8
000
jobs
in
those
core
counties.
I
To
me,
it
lines
up
very
well
with
the
billions
of
dollars
that
have
been
invested
by
the
distilling
firms
in
their
production
facilities
in
their
tours,
their
their
tasting
rooms.
The
whole
package
that
they
use
for
tourism
and
the
result
is
strong
growth
and
so
I
guess.
I
My
point
is
there
are
tax
revenues
flowing
to
the
local
governments
other
than
the
core
distilling
operations
and
the
warehousing
operations
they're,
also
getting
job
growth,
some
cases,
occupational,
tax
growth
from
the
hospitality
jobs,
but
also
room
taxes
and
restaurant
taxes
for
many
of
the
Cities,
so
that
that's
all
I
have
I
know.
We
didn't
have
much
time
today.
F
Obviously
little
different
scenario
in
God
forbid.
We
never
want
to
see
an
industry
end
up
in
Decline,
but
you
know
consumer
consumer
choices
being
what
they
are
and
consumers
being
fickle.
These
things
happen
right
and
hypothetically
I
wonder
what
it.
What
is
kind
of
that
Tipping
Point,
where
too
many
eggs
are
in
one
industry's
basket,
as
it
relates
to
the
overall
tax
revenues
of
Any
Given
jurisdiction,
because
I
do
remember.
F
Presidents
I,
remember
sitting
in
the
conference
room
with
a
with
school
district
budgets
in
our
hands
saying
what
are
we
going
to
do
for
these
people
right
and
I
certainly
don't
want
to
sit
there
again,
and
you
know
it's
kind
of,
especially
when
you're
on
the
exponential
portion
of
a
growth
curve.
It
seems
like
an
impossibility,
but,
as
you
know,
the
president's
region
and
many
others
found
out
there
ever
all
parades
come
to
an
end.
So
you
know
what
is
there
a
hypothetical?
F
I
I,
don't
think
the
analogy
with
coal
Works,
quite
so
well
in
the
central
part
of
the
state,
it's
more
Diversified,
economically
population,
more
stable
and
as
the
the
Keiko
person,
Mr
Henderson
I
think
is
his
name
said
last
month.
I
think
the
line
was,
if
you've
seen
one
County
you've
seen
one
County
they're,
also
different,
maybe
Marion
County
would
probably
of
all
these
would
probably
be
the
most
exposed
to
being
a
one
industry
County
dependent
upon.
I
Would
you
agree
Eric
and
but
you
take
a
place
like
Bullitt
County,
it's
absolutely
booming
with
Logistics
and
warehousing
centers
population
growth
is
very
strong.
It's
part
of
the
Louisville
metropolitan
area,
so
you
know
they
have
a
very,
very
Diversified
and
strong
growing
economy,
Nelson
County,
much
more
Diversified
and
strong
and
bigger
I.
Don't
so
it
doesn't
smell
like
it's
as
vulnerable
as
Eastern
Kentucky
was
to
the
coal
industry.
To
me.
H
But
you're
exactly
right,
Senator
that
that's!
Why
we're
looking
at
this
as
well,
because
we
don't
want
to
be
in
that
position
where,
if,
for
some
reason,
the
industry
took
a
downturn
like
they
did
the
1970s
and
1980s
when
consumers
exchange
that
schools
are
losing
money
and
counties
are
losing
money
because
we're
not
filling
as
many
barrels
or
we're
not
dumping
as
many
barrels
out
there.
So
we
want
comp.
We
want
to
attract
more
distillers
here
to
increase
that
tax
base
to
make
up
for
that.
F
Thank
you
and
Eric,
specifically,
you
weren't
able
to
be
here
last
time
and
and
make
a
response
to
a
a
question
that
I
asked.
But
a
lot
of
these
taxing
jurisdictions
feel
as
if
they
went
along
with
IRB
I,
don't
mean
schemes
in
a
negative
term,
but
it
structures
you're
right
based
off
of
the
anticipation
of
Bourbon
Barrel
revenues,
and
it
was
a
bit
of
an
offsetting
Factor
there
and
felt
like
there
might
be
not
deliberately
on
the
front
end.
F
But
at
this
point
a
a
partner
in
a
transaction
who's
not
upholding
their
end.
How
do
you
mitigate
the
feeling
and
the
impact
necessarily
of
previous
analyzes
that
were
done
for
those
kinds
of
jurisdictions.
H
I
think
you'd
found
the
industry
to
be
willing
Partners
to
work
with
the
local
communities
on
those
those
are
contracts
and,
as
far
as
as
we
know,
those
contracts
will
be
honored,
but
if
there
is
a
solution,
I
know
going
forward.
H
I
think
judge
Eisen
mentioned
that
the
IRB
with
ijw
in
Shelby
County
includes
an
escape
clause
on
there,
so
rail
tax
did
go
away,
that
the
IRB
would
go
away,
but
I
think
that
you
would
would
find
that
the
distilling
Partners
in
those
communities
would
like
to
work
with
their
local
communities
if
this
happened
to
figure
out
a
way
to
honor
those
contracts.
C
Thank
you,
Mr
President
I
have
a
kind
of
a
comment
about
what
we're
discussing,
of
course,
I'm
from
Bullitt
County,
so
we're
seeing
a
real
explosion
right
now,
we've
got
32
new
warehouses.
Rick
house
is
coming
up.
I
know
when
you've
mentioned
that
that
in
other
states,
they're
now
producing
the
bourbon
and
that
a
lot
of
places
want
to
go
there,
and
they
can
do
that
of
course
like
if
they
go
to
Texas
and
there
are
bourbon
places
in
Texas,
it's
too
hot
I
mean
the
color's
wrong
the
flavor's
wrong.
H
I
I
think
you're,
seeing
in
some
of
these
areas
as
the
industry
is
growing,
so
much
and
I
mean
you're
not
going
to
put
a
warehouse
in
an
urban
area
anymore.
You're
looking
at
this,
that
a
lot
of
this
is
becoming
land
use
issues
and
whether
or
not
the
local
communities
think
that
Distillery
warehouses
are
proper
uses
from
an
agricultural
standpoint
in
those
communities
and
that's
for
every
Community
to
decide
and
Anderson.
County
has
certainly
been
a
point
of
controversy
right
now.
H
The
same
thing
goes
in
Franklin
County
in
Henry
County,
for
example
as
well.
So
those
are
situations
that
the
local
communities
are
working
through
right
now
we
would
like
to
be
able
to
expand
and
and
again
add
jobs
and
investment
in
those
counties
But.
Ultimately,
it's
going
to
come
down
to
in
some
of
those
a
land
use
issue.
G
Thank
you,
Mr
President
and
I
I.
Guess
I
just
want
to
you
kind
of
describe
Marion
County
as
a
one
industry,
Community
I'm,
going
to
take
exception
to
that
I.
I
G
The
most
vulnerable-
well,
it's
you
know
we're
proud
of
limestone
Distillery,
Makers,
Mark
and
Diageo,
were
you
know
their
their
great
corporate
citizens
and
we're
very
proud
of
them,
but
we
are
very
Diversified
community.
In
fact,
per
capita.
G
We
have
more
jobs
in
manufacturing
than
probably
any
community
in
the
state,
so
we've
been
blessed
with
the
with
a
lot,
but
it
would
be
an
absolute
tsunami
if
this
16
or
this
these
tax
dollars
went
away
for
for
Marion,
County
and
Nelson
County
between
the
two
half
the
world's
bourbon
is
stored
in
my
Senate
District
and
I.
Keep
saying
that,
but
I.
G
I
Though
Senator
actually
I
thank
you
and
you
actually
helped
make
my
point
I.
Think
because
I
don't
think
that
scenario
applies
to
Eastern
Kentucky.
When
coal
went
away,
they
did
not
have
a
manufacturing
base
and
they
still
do
not
have
much
of
one.
So
the
central
part
of
Kentucky
I
think
is
much
more
economically
healthy
and
diversified
than
Eastern
Kentucky.
You
know
when,
when
coals
started,
dwindling.
G
Well,
it
I
guess
the
backlash
is
kind
of
the
same
for
cons.
You
know
that
increase
in
property
tax
for
the
other
citizens
is,
is
obviously
a
concern,
whether
you're
in
Eastern,
Kentucky
or
or
in
Central
kentucky
it's
an
increase
in
property
taxes,
an
increase,
and
it's
always
very
serious.
Thank
you.
B
Thank
you,
Mr
President,
I
I
have
a
comment
more
so
than
a
question
in
looking
at
those
counties
and
their
property
tax
rates
going
down
and
I
just
I'm
also
wondering
sitting
here,
as
we
all
know
that
property
values
have
gone
up
so
much
we've
all
seen
what's
happening.
I
would
love
to
see
what
the
actual
revenues
are.
Not
necessarily
that
rate,
because
I
would
almost
bet
that
those
incomes
are
about
the
same,
if
not
even
more.
Even
though
the
rate's
gone
down,
property
values
have
has
risen.
I
Well,
we've
got
it
for
two
of
them:
there's
Anderson
and
and
there's
there's
Marion.
If
you
look
at
the
the
top
of
the
chart,
see
the
real
estate
intangible
personal
property
tax,
those
are
the
actual
revenues,
the
Fiscal
Court
and
then
you
can
see
also
the
school
system
revenues
and
we've
got
it
for.
I
A
I
do
want
to
say
this.
You
know
Sandra.
A
Area
but
diversification
is
very
much
needed
in
a
lot
of
areas
and
I.
Don't
think
people
really
understand
in
Eastern
Kentucky
Dynamic.
It's
really
interesting
to
study
from
a
sociological
position
and
an
economics
position,
because
it
was
so
dependent
on
coal
and
actually
at
one
time
in
this
state
Severance
tax
alone
generated
close
to
20
percent
Senator
McDaniel
of
all
state
revenues,
just
Severance
tax.
A
Thank
you.
All
I
think
we
have
to
wrap
up
Jennifer
Hayes
on
our
own
staff,
to
kind
of
give
a
recap.
A
About
kind
of
the
industry
taxes
that
we've
heard
don't
think
because
she's
at
the
very
end,
this
will
take
real
long,
because
we've
heard
of
some
of
this
it's
just
kind
of
to
bring
it
back
together.
D
So
once
again,
I'm
Jennifer
Hayes
committee
staff,
administrator
for
Appropriations
and
Revenue
and
staff
to
this
task
force
as
well.
D
I'll,
give
a
shout
out
to
the
lrc
economists
that
are
was
sitting
beside
back
there
in
the
audience
because
they
track
anomalies
things
that
are
strange
out
there
in
the
universe,
and
so
this
is
going
to
be
strange
because
a
r
staff
is
sitting
here
with
a
one-page
presentation.
So
if
you
cannot
find
it
in
your
packet,
look
for
the
one
piece
of
paper
that
is
colored
has
colored
pictures
on
it.
So
this
is
very
strange.
D
Just
let
me
say
that
once
again,
but
you're
absolutely
correct
Senator
showers,
we
we
continue
to
get
questions
from
legislators
and
questions
from
the
public
about
the
different
taxes
that
are
paid
by
this
industry
and
the
requirements
for
those
taxes.
And
so
what
I
hope
to
give?
You
is
a
one
pager
that
you
can
take
away.
That
in
pictorial
form
will
give
you
just
enough
facts
to
understand
where
in
the
industry
that
these
taxes
occur,
and
so,
if
you'll
remember
back
to
the
very
first
meeting
of
this
task
force.
D
I
sat
here
for
an
hour
and
a
half
explaining
those
different
taxes
and
the
credits
and
various
aspects
of
this
industry
and
we've
really
gotten
the
weeds
and
so
I'm
trying
to
bring
you
back
up
out
of
the
weeds
and
just
a
refresher
of
that
first
discussion
is
what
I
hope
to
do
today.
So,
if
you
remember,
our
tax
system
is
built
on
the
three-tier
system.
We
have
the
manufacturer,
we
have
the
wholesaler,
we
have
the
retailer.
Those
are
the
three
tiers
within
the
system.
D
D
The
first
tax
that
is
similar
and
the
the
similar
taxes
are
in
white
boxes
in
on
your
handout.
So
that's
a
key.
The
first
similar
tax
across
the
industry
is
state
income
tax,
as
well
as
other
businesses
doing
business
in
Kentucky,
so
state
income,
tax,
five
percent
of
net
income,
just
bullet
points
related
to
the
tax.
So
very
quick,
we're
going
to
run
through
this.
D
The
second
similar
tax
is
the
local
occupational
license
fees
at
the
business
level.
These
local
occupational
license
fees
are
generally
those
paid
by
the
business
and
they
are
based
upon
a
certain
percentage
of
net
profits
and
the
manufacturer,
the
host
seller
and
the
retailer
if
they
are
doing
business
within
a
local
jurisdiction
where
those
fees
are
imposed,
the
business
would
pay
that
you'll
notice
that
that
box
is
not
there
for
the
direct
shipper.
The
direct
shipper
is
an
out-of-state
company
generally.
D
The
next
thing
that
is
very
similar
across
at
least
three
of
the
industry
Partners
is
the
state
and
local
property
tax.
Remember
this
is
both
real
and
tangible
property.
It
can
be
at
the
state
level
it
can
be
at
the
local
level.
Of
course,
the
local
property
tax
is
what
we've
been
talking
about
once
again,
it
does
not
apply
to
the
direct
shipper.
They
don't
have
property
in
this
state.
As
a
general
rule,
the
thing
that
becomes
different
now
we're
entering
the
colored
box
stage
of
the
presentation.
D
The
thing
that
is
different
is
the
manufacturer
is
required
to
pay
the
ad
valorem
tax
on
barrels
and
distillates.
Remember
that's
five
cents
per
100
of
value,
and,
while
that's,
there
is
not
anything
that
the
general
assembly
can
impact
upon
this.
This
next
box,
it's
most
interesting
to
talk
about,
because
the
manufacturer
is
also
responsible
for
paying
a
federal
excise
tax,
I
think
the
excess
taxes
imposed
upon
the
warehouseman.
D
That's
the
owner
proprietor,
a
custodian
of
the
Bonded
Warehouse,
so
that
federal
tax
is
paid
by
the
manufacturer
not
paid
by
the
wholesaler
or
the
retailer
or
the
direct
shipper.
D
The
next
tax
that
is
different
is
the
state
wholesale
sales
tax,
eleven
percent
of
groceries
gross
receipts.
This
is
only
paid
by
the
wholesaler.
Remember
the
wholesaler
is
that
big
building
I
was
able
when
I
was
in
Denver
to
tour
a
wholesaler
of
distilled
Spirits.
While
it
was
out
there
at
the
ncsl
meeting
this
summer,
huge
building,
conveyor
belts,
they
picked
the
product,
you
know
through
all
these
cases
and
and
and
fulfill
the
orders
that
are
going
to
the
retailer.
D
The
direct
shipper,
let
me
point
out,
the
direct
shipper
is
acting
as
that
wholesaler
in
in
a
transaction
that
comes
into
this
state,
so
they
are
also
paying
the
11
of
gross
receipts.
D
The
state
alcohol
excess
tax
is
the
second
alcohol
tax
that
is
paid
by
the
wholesaler
and
the
direct
shipper.
Remember
that's
a
dollar
and
ninety
two
cents
per
gallon
for
each
gallon
sold
and
then,
finally,
only
on
the
wholesaler
is
the
case:
sales
tax,
five
cents
for
each
case
that
is
picked
up
from
the
manufacturer
sold
to
the
wholesaler
that
case
sales
tax
is
paid
by
the
wholesale.
D
That
is,
a
retail
tax,
while
the
duty
to
collect
and
remit
is
imposed
upon
the
retailer.
You
do
understand
that
the
consumer
pays
that
when
they
purchase
the
the
good
or
the
service
from
the
retailer,
so
I
go
in
I,
buy
75
dollar
bottle
from
a
retailer,
then
I
am
paying
six
percent
on
top
of
that
sales
price
and
the
retailer
collects
that
from
me
and
remits
it
to
the
state
the
direct
shipper.
D
If
they
have
met
the
provisions
to
create
Nexus
for
sales
tax
purposes,
remember
they
are
out
of
state.
So
if
they
meet
those
thresholds,
they
are
also
collecting
the
six
percent
sales
tax
for
sales
that
are
directly
shipped
into
the
Commonwealth.
D
The
next
thing
is
the
local
alcohol
license
fees,
local
fees
imposed
on
the
retailer,
which
can
be
based
upon
a
certain
percentage
of
gross
receipts
from
the
sale
of
alcohol.
That
might
be
a
retailer
retail
store.
Like
you
see
the
picture,
it
might
also
be
a
restaurant
it
that
is
serving
drinks
of
alcohol.
D
There
can
also
be
a
license
fee
that
is
a
flat
rate,
an
annual
dollar
per
year,
or
there
may
be
regulatory
fees
that
are
also
imposed
for
policing,
which
are
also
a
percentage
of
gross
receipts.
So
once
again,
depending
upon
the
local
jurisdiction
within
which
that
retailer
is
operating,
there
are
several
different
local
alcohol
license
fees
that
may
apply.
D
And
then,
finally,
we
have
the
employees
who
are
working
throughout
this
industry
and
compared
to
all
other
Industries,
so
that
employee
is
responsible
for
state
income
tax.
Now
yeah
I
think
in
the
prior
presentation
you
saw
that
there
was
a
line
on
the
chart
that
said
payroll
taxes
that
are
remitted.
D
Yes,
the
manufacturer,
the
wholesaler
the
retailer
they
do,
remit
those
taxes,
but
they
are
actually
withheld
from
the
employee's
paycheck.
So
the
employee
is
actually
paying
that
tax,
it's
just
being
remitted
to
either
the
state
or
the
local
jurisdiction
on
behalf
of
the
employee
by
the
employer.
Withholding
is
that
process.
If
that
withholding
requirement
we're
not
there
that
money
would
be
given
to
the
employee
in
their
normal
wages,
it
would
not
be
withheld.
D
The
employee's
paycheck
would
go
up,
but
then
the
employee
would
be
responsible
for
paying
the
state
income
tax
or
the
local
occupational
license
fee.
So
the
withholding
requirement
is
a
means
of
assisting
the
employee
to
pay
that
over
time
and
ensuring
compliance
with
the
income
tax
laws.
D
A
Thank
you,
I
do
have
one
comment
and
then
one
question
when
preparing
a
color
photo
for
us.
If
you
would,
please
use
a
Kentucky
corporation
on
your
distribution
truck.
D
A
A
Actually,
it's
owned
by
Kentucky
Corporation.
I
A
A
D
A
G
G
When
we
did
this
in
2014,
the
distillers
were
going
to
get
I.
Guess
we,
the
avalorium
tax
back
in
the
form
of
a
tax
credit
and
and
as
Senator
Stivers
asked.
I
was
just
curious.
How
you
know
I've
I've
heard
different
figures,
one
of
them
and
I've
I
have
a
hard
time,
believing
that
that
that
were
were
I,
guess
giving
back
that
little
as
what
what
they've
actually
what
we
actually
thought.
This
would
cost
so
I
guess,
along
with
with
the
senator
stiversary
it's
got.
The
information
would
be
very
helpful
and
very
good.
A
A
Then
I
will
say
this
representative,
McCoy
and
I
will
get
together
in
the
next
few
days
to
kind
of
discuss
the
path
forward.
I
think
what
we
have
tried
to
do
is
not
to
create
a
battlefield
of
conflict
but
to
set
the
table
for
a
discussion
that
is
collaborative
to
see.
If
there
are
some
potential
Solutions
here,
I
think
we
have
shown
to
try
to
have
produced
information
that
shows
the
impact,
positive
and
negatives
and
what
would
happen
in
various
scenarios
in
the
ad
valorem
tax
on
Bourbon
barrels.
A
But
we
have
also
seen
the
positive
impacts
of
changing
the
tax
structure
and
economic
Dynamics
with
tdas
and
14
and
15
of
how
changing
a
rate
may
actually
grow
your
base
and
increase
your
overall
Collections
and
I
think
that
has
been
kind
of
mentioned
here
with
the
Laffer,
Curve
and
then
I
think
almost
reflected
in
some
of
the
documents
that
Dr
Coombs
did.
But
we
will
I
suggest
and
once
I
get
with
my
co-chair.
We
will
put
this
out
in
a
more
formal
way
of
people.
A
Thinking
about
how
we
work
in
this
collaborative
form
to
see
if
there
are
some
potential
Solutions
to
Aid
and
assist
the
industry
to
grow
even
more
without
having
negative
impact
on
localities.
So
if
there
is
not
any
other
discussion
or
member
seeking
recognition
or
adjourned.