WATERS: Super-size restaurant taxes fund tourism’s shiny new toys


All taxpayers and restaurant owners of Shelbyville and Madisonville wanted this Christmas was to be left alone by pro-tax politicians and bureaucrats.

Nearly 3,000 of them even went to the trouble of signing Kentucky’s biggest Christmas list – a petition opposing Shelbyville’s planned super-sized restaurant tax, which the state allows fourth and fifth-class cities to pass in order to buy shiny new toys known as “tourism-related projects.”

Local politicians addicted to spending taxpayer dollars on nonessential street-scaping projects want to use the revenue raised from Shelbyville’s restaurant tax on items like a $4,000 light pole, $1,000 six-foot bench and $850 “litter receptacle,” according to city engineer Jennifer Harrell’s email to Mayor Thomas Hardesty outlining the costs of these requested toys.

Thousands of local residents and restaurant owners have made it clear: they’d rather keep their money and spend it as they – not some local mayor with visions of government-funded grandeur – see fit.

The unelected officials at local tourism agencies will have none of that, however.These bureaucrats have cast a memory spell over elected officials to the point that some council members not only support such taxes but also minimize – or even forget – who earned and owns those dollars.

I had to remind Shelbyville councilman Bob Andriot concerning this matter as he wondered aloud while addressing local tourism officials at a recent council meeting: “Are these our dollars or your dollars?”

“They’re neither, sir,” I told him during the comment period.

They belong to local servers, who are the least able to afford losing them.

Bill Hisle, who owns five Cattleman’s Roadhouse restaurants in Kentucky, including one in Shelbyville, told me that servers in his restaurants – many of whom are single mothers – carry the burden of such taxes.

“People tend to stick to their planned budget when they go out to a restaurant, and they will continue to do so – by taking the tax out of servers’ tips rather than increasing how much they actually spend,” Hisle said. “Plus, it’s not as if Shelbyville is going to file for bankruptcy any time soon. The city has money in the bank.”

Some local politicians voted for this huge profligate tax apparently without even knowing how current revenues in their general funds are spent.

Madisonville city councilman Raymond Marion during a Dec. 7 council meeting had to pause during a tirade berating restaurant-tax opponents in his community to find out more about how current dollars are spent.

“There’s a lot of money that we spend out for tourism that comes out of the General Fund. Am I correct?” he wondered inquisitively while turning to other council members before restarting his diatribe.

Even though he had to ask in that open meeting whether or not the tax was even needed to relieve some phantom-like pressure on his city’s budget, he and three other council members still voted for it.

You can bet their constituents – like the hard-working ladies out at the local Country Cupboard (a favorite Madisonville lunch location of this columnist) or Skip and Teresa McKinley, owners and operators of McKinley’s Bread Store & Deli in downtown Shelbyville for 19 years – know everything about their own budgets as they shop for those gifts on their children’s and grandchildren’s lists this Christmas.

They likely will have less money available for those requests next Christmas as beginning Jan. 1, they will be forced to collect more from their customers – most of whom are local residents – in order to fund some shiny new garbage can at the top of the local tourism-agency’s list.

At least they’ll have an upscale bench on which to sit while resting from the heavy tax burden they carry and pondering how to keep their doors open.

Jim Waters is president of the Bluegrass Institute, Kentucky’s free-market think tank. Reach him at Read previously published columns at