NELSON COUNTY, Ky. — When you drink a glass of bourbon, you're helping to fund local schools, fire departments, and law enforcement.
Distillers pay taxes on the aging barrels they have on their property each year. It's a tax some lawmakers are looking to remove. With that, would also be the loss of millions to communities across the Commonwealth.
Bourbon is barreled and aging in 40 counties across Kentucky. Each of those counties gets a cut of the bourbon barrel tax.
In 2022, distillers paid $39.5 million in taxes on their barrels. of that, $26 million went to schools across Kentucky.
Stakeholders, from school districts to fire departments, held a meeting to discuss their concerns Monday night in Nelson County.
"The money from the bourbon industry currently in Nelson County Schools is $5 million dollars a year," Superintendent Wes Bradley explained.
To be clear, the school districts would not lose that money, instead, it would be made up in other ways.
As Bullitt County Public Schools Superintendent Jesse Bacon said, "School districts will be forced to make up the bourbon barrel revenue by increasing property taxes." His district would need to make up $3 million.
It goes beyond schools, sheriff's offices and fire departments which have grown dependent on the tax dollars.
Nelson County Sheriff Ramon Pineiroa said his department would lose between $235,000 and $250,000.
Bullitt County Judge Executive Jerry Summers said their fire department would be non-existent without the tax, it makes up about half their budget.
The Kentucky Firefighters Association officially opposes HB 5.
President Rick Bobo said, "I represent 734 fire departments and they are all coming out against this thing and the senators and representatives are going to get some phone calls. It's going to be a heavy load, get your switchers ready."
The Kentucky Distillers Association shared a statement, saying in part, "The success or failure of House Bill 5 will determine whether Kentucky's distilling industry continues to call the Commonwealth home, bringing jobs and tax revenue as it grows, or whether it is forced to look at other states for future growth or even potentially relocating existing facilities. "
In response, Pam Thomas with the Kentucky Center for Economic Policy cites the $2.1 billion dollars spent by the bourbon industry on new development in Kentucky.
"And we know that every single one of those companies -- every single one of them did a cost-benefit analysis that included the bourbon tax," Thomas said. "And they came anyway."
House Speaker David Osborne introduced the bill on Wednesday.
HB5 is currently in the House Committee on Appropriations and revenue. It would need 60 votes in support to leave the House this year.
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