Rookie City Commissioner Eric Whisman this week raised an intriguing possibility — that there may be millions in untapped tax revenue owed to the city by two privately owned state-leased buildings in Frankfort that, in his opinion, don’t qualify as being tax-exempt but are currently listed as such.
Count us among those interested in a legal assessment of the question.
Fellow Commissioners John Sower, Scott Tippett and Katrisha Waldridge and City Manager Keith Parker urged caution when Whisman brought up the matter at the end of Monday's commission meeting. We take the point that there's always risk in a government town of alienating your anchor employer.
But if ever there were a good time to raise such a question with state government, the beginning of a new gubernatorial administration just might be it.
The two buildings Whisman is referring to are the Mayo-Underwood Building, which recently opened on Mero Street, and the 300 Building, on Sower Boulevard off the East-West Connector. Both were built as a public-private partnership (P-3) — which means that when long-term leases conclude, the structures will become state-owned.
Whisman contends the city is losing roughly $2.6 million in annual tax revenue because the P-3 buildings are listed as tax-exempt.
Unencumbered by the bias of the prior administrations (Steve Beshear and Matt Bevin) that negotiated the two P-3s, Gov.-elect Andy Beshear's staff would offer fresh eyes on the question of whether the temporary owners of those buildings should be paying local property taxes. Whisman might be a step ahead, saying he's already consulted with the Attorney General's Office, which Andy Beshear now leads.
Tippett agreed with Whisman “in spirit” but expressed concern that ruffling a few feathers might prompt the state to take its business and employees elsewhere. Similarly, Parker said he doesn’t want to “rock the boat when we’re getting a lot things good for the city.”
Waldridge took a level-headed approach of saying the commission should find a way to work with the state. However, she also said Whisman should not press the issue without the support of his colleagues on the commission.
We agree. It's a delicate topic but worthy of discussion and consultation, especially if a unified city commission approached the state. Even if taxation of the two P-3 buildings didn't come to fruition, dialogue about the community's fiscal needs and the challenges of a largely exempt tax base might yield other forms of state assistance for the capital city.