A question regarding reallocation of the county’s use tax that will appear on the April 7 ballot was a topic of discussion at last week’s Lexington City Council meeting, a public hearing last Wednesday at the county courthouse, and a meeting of county mayors and County Commissioners last Thursday night at City Hall.County use tax reflects the county sales tax rate and is applied to online purchases made from out of state vendors such as Amazon or Walmart.

The question does not affect the amount charged, only how it can be used.

Currently, use tax is dedicated to hard materials for driving surfaces throughout the county. The reallocation question would allow Lafayette County to use funds collected by the tax for its general fund.

Under current practice, the county only takes a 3 percent administrative fee from the use tax, and distributes the rest to road districts and cities throughout the county.

The ballot question does not limit how much of the proceeds the county could use for its own purposes.

During the City Council meeting last Tuesday night, Mayor Tom Hughes and Councilman Mike Kramer expressed concerns about the potential loss of use tax funds for the city. The city currently receives around $81,600 in use tax funds from the county. Currently, 20 percent of the county use tax collected is directed to cities. If the measure is approved, this percentage would drop to 10 in the first year and zero the second year.

Hughes said the ballot language doesn’t tell the whole story, adding he wants the public to be as informed as possible prior to election day.

During last Wednesday’s public hearing, County Commissioners gave a history of the use tax and explained the rationale behind the ballot question. Northern Commissioner Monica Ritter said that when the use tax originally went into place in 2006, around $200,000 was collected. Those extra dollars went toward maintaining county roads. “But our purchasing habits have changed, with more and more online purchases,” remarked Ritter.

As a result, the use tax collected by the county has grown to around $2 million, while regular sales tax revenue has remained flat. Commissioners explained the use tax isn’t in addition to the sales tax — it’s one or the other, never both.

The plan

Commissioners stated the county’s intention is to continue to maintain the roads, but also to allow for additional spending of its use tax.

With an expanded used tax, Southern Commissioner Michael Brown said the county plan is: 1) No use tax or property tax increase 2) To help keep the county debt free, by paying cash instead of borrowing.

3) To keep current county services and jobs intact. Why the change?

The Commissioners said the county is basically asking for more flexibility. As things currently stand, the county can only spend the use tax on hard-surface roads. The county can’t spend any of those dollars on road equipment, county services, or county employees.

What’s the problem?

There are ever expanding mandates from both the state and federal government.

These are not optional.

Because the county’s current use tax is restricted, any mandated expenses must come from the county’s current resources. And, if funds are not available, the county will be required to cut services as well as some county employees to pay for these required programs.

The Commissioners related that the new spending requirements, along with high inflation over the last several years, force the county to ask for this change.