The hits keep on coming for Rupp Arena financing as Senate unlikely to pass hotel tax bill
03/31/2014 08:09 PM
On the issue of financing for the renovation of the Rupp Arena project in Lexington, the state legislature did its best Willie Cauley-Stein impression with back-to-back rejections.
The General Assembly approved a state budget bill that doesn’t specifically tag money for $65 million bonds to help pay for the $310 million project. On Saturday, Lexington Mayor Jim Gray said not having that money in the budget would “put a stake in the heart of the project.”
There remains in the budget “a path forward” for the state to kick in money to sell those bonds sometime over the next two years, as House Speaker Greg Stumbo said. But it’s not guaranteed.
Lawmakers designed the budget language so that Lexington city, University of Kentucky and Lexington Convention Center officials would have to lock down a solid financing plan first before the General Assembly would move $6 million out of the state’s rainy day fund in order to start pay for the bonds.
So perhaps the biggest blow to the project, is that the General Assembly seems unlikely to agree to a major piece of the tentative financing that the project’s proponents are pushing.
Republican Senate leaders said Monday the chamber isn’t likely to take up a House bill that would allow Lexington to raise its tax on hotel rooms from 6 percent to 8.5 percent. That would generate more than $3 million to go toward the construction. That’s one of six major revenue sources to pay off the project.
Senate President Robert Stivers, R-Manchester, said it’s not going to happen.
As for the removal of the specific provision to make payments on the $65 million in bonds, the Lexington-area Senators weren’t happy on Monday. But they still voted for the $20 billion two-year budget bill.
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