Chamber Board Votes to Support Town Traffic, Tourism Initiatives

August 26, 2015 | Posted By: Connor Watkins

On August 19th, our Board of Directors voted unanimously to support the Town of Lexington’s traffic and tourism initiatives to address three heavily congested intersections by use of funds generated by Hospitality Taxes.

The Board’s decision came after vetting the pros and cons of using H Taxes to fund the ever escalating traffic in and around the Town.

If you would like more detailed reasoning after reading the GLC&VC Board Letter of Support from our Chairman Marvin Robinson to Mayor MacDougall and Town Council, the list below includes additional facts regarding Lexington's infrastructure history and alternative solutions to road improvements.

For specific information on each of the improvement projects, click here.

  • The Town of Lexington has approximately doubled in population every 10 years for the last 40 years (according to the 2010 census figures), and we see no signs of a slowdown because of the great Town that we have.This has stressed traffic infrastructure to the max.
  • The Town has not had funding for major traffic improvements through the years to keep up with growth.
  • The last time the Town of Lexington received any significant funding for road improvements was 2008, and the only reason we received that was because it was the TARP money, the $787 billion printed and distributed by the federal government during the subprime scandal, which was designated for “shovel ready projects”.  Outside of another bailout such as this, which none of us wants, the chance of us getting any significant funds from federal sources is slim to ‘nil.
  • Our state legislature has failed to fully fund the “local government fund” for many years now, but again, even if fully funded, this small amount could not possibly address the issues we face with our annual growth.
  • Therefore, Town Council is seeking to be proactive and use local funds to solve local problems.  Otherwise, we passively sit by while our traffic conditions deteriorate, waiting for funds that haven’t been produced in the last 10 years and likely will not be produced in the next decade.
  • The one funding mechanism given to local governments by state law for projects such as the ones we are proposing is a Hospitality Tax of up to 2%.  This is a tax that is added to all “prepared foods” sold within the Town limits.  This includes all restaurants, service stations, and other places of business that cook and prepare food.  It DOES NOT include grocery items or unprepared foods.  So if you buy a Rotisserie chicken that is fully cooked and ready to eat at Food Lion, it is taxed at 2%, but if you buy a raw chicken and canned green beans and a loaf of bread, none of those items are taxed.
  • The advantage of this tax is that it is equally shared by all people who use the congested roadways of Lexington, as a majority of the tax will be paid by people who live in the area but outside the town limits.  Thus, it is fair in that all who benefit from it share the burden of paying for it.
  • This is not punitive to restaurant owners, as it is a tax added to the consumer’s bill at the register.
  • As for estimates and impact to individuals and families, it is almost impossible to gauge this because the more discretionary income one has, the more he or she generally eats out at restaurants.  Thus, this is not a luxury tax, but it is a tax tied to discretionary spending.
  • The ultimate solution for these types of problems is a gasoline tax increase, which is a true user tax, with significant revenues from this increase given to local governments. Gas is at $2/gallon and most producers are running at 50-75% of capacity because the market prices are so low. An immediate hike on gasoline taxes, the first in multiple decades, is the common sense answer, but our state legislature can’t seem to get it done, as it is written in this recent opinion piece at The State Newspaper:  http://www.thestate.com/opinion/editorials/article31652090.html.