LOST is a Loser for Kentuckians

The legislature is considering House Bill 2 to allow local governments to add a one percent local sales tax.  This would mean you would pay a seven percent sales tax instead of the current six percent. In “government speak” it’s called a local option sales tax (LOST). The proponents of this bill like to point out that voters in their own communities would choose to tax themselves to pay for projects they want. But the only way that could be true is if the vote was conducted at the cash register. The reality is that many Kentuckians will end up paying for projects they didn’t vote for and don’t get to use.

This new tax will further divide Kentucky’s urban versus rural areas. Voters in rural communities that go to bigger cities to shop won’t have any say; they will only get to pay. Almost one-third of the revenue raised by this measure state-wide would go to Louisville/Jefferson County. A quick analysis of this new tax shows that Kentucky’s top ten most populated cities will get to spend two-thirds of the new tax, leaving the rest of the hard-working folks in the rural parts of the state further behind.

The proponents of this bill have tried to insinuate that the business community supports this bill. But the reality is that the business community pays one-third of the sales taxes collected in Kentucky. Businesses pay sales taxes on products and services that they use such as supplies, equipment, and utilities. An increase in the sales tax at the local level would cost Kentucky businesses approximately $165 million dollars.

The amount of money this new tax will raise is staggering, approximately $500 million dollars each year. Kentucky businesses will end up paying for one-third of this new tax and consumers will shoulder the rest. Taking a half a billion dollars out of the economy is not without negative consequences on the commonwealth’s tax revenue, consumer spending, and future business expansion.

Burnett, Cranley Join Kentucky Retail Federation Board of Directors

The Kentucky Retail Federation welcomes Matt Burnett, Wakefield-Scearce Galleries and Kevin Cranley, Willis Music Company to the Federation’s 2016 board of directors.

Matt Burnett, CFO of Wakefield-Scearce Galleries in Shelbyville, brings his experience as a third-generation retailer and 14 years invested in the retailing industry to the board.

Kevin Cranley, president of Willis Music Company, has held various positions in the company and brings 40 years of retail experience to the board. Willis Music Company is headquartered in Florence and has locations in Ohio and Kentucky.

Wakefield-Scearce and Willis Music Company were recently showcased in the 2015 Retail Across America: Kentucky video series and attended the National Retail Federation’s 2015 Retail Advocates Summit on behalf of the commonwealth to discuss the need to protect retailers through data breach security and level the playing field via e-fairness legislation.

“Matt and Kevin are great additions to the Federation’s board of directors,” Tod Griffin, KRF President commented. “Both bring unique and exceptional experience to the board and will lend their expertise to guiding the Federation in the right direction.”

The following individuals were re-elected to serve another two-year term on the Kentucky Retail Federation Board of Directors: Ed McCoy, Kerr Office Group; Bill Johnson, Target; Frank Julian, Macy’s; Calvin Kaufman, The Kroger Company; Paul Chambers, Speedway; A.F. Dawahare, Director Emeritus and John Hackett, Director Emeritus.

Ed McCoy, Kerr Office Group; and Travis Doster, Texas Roadhouse will complete their two-year term as Chairman and Chairman-elect respectively during the remainder of 2016.

Sixty Percent of Kentucky’s Independent Retailers to Participate in Black Friday and Thanksgiving Weekend Sales

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Kentucky Retail Federation’s 2015 Holiday Shopping Season Survey Results Released

Sixty percent of independent retailers plan to offer sales or shopping incentives during Black Friday and the Thanksgiving weekend, however only 20 percent reported intentions to participate in the Cyber Monday action taking place next week online. When asked about Small Business Saturday and shop local initiatives, approximately 60 percent of respondents said they plan to participate in the event or one like it this holiday season.

In a recent survey by the Kentucky Retail Federation, independent retailers across the Commonwealth were asked about their efforts to prepare for the holiday shopping season. While big box retailers tend to be known for increasing their seasonal hours, only 20 percent of Kentucky’s independent retailer respondents intend to increase their normal store hours during the 2015 holiday shopping season. Of the independent retailers hiring seasonal employees this year, almost all reported no plans to increase their seasonal workforce from the size of their 2014 holiday seasonal employment.

The vast majority (or 90 percent) of respondents said their inventory for the 2015 holiday shopping season will be the same or equal to last year with one-third saying they had increased their inventory this year. The percentage of respondents reporting an increase in seasonal inventory this year is up a surprising 22 percent from 2014’s survey which showed eight percent of respondents reporting an increase in seasonal inventory.

Of the independent retailers surveyed across the state, the most popular items consumers will be shopping for this holiday season include mainly electronics; video games, TVs but also some local art and foods and home goods.

For those shoppers unsure of what to give the people on their list this year, it is good to know that 80 percent of respondents reported selling gift cards or gift certificates at their independent retail store.

Kentucky’s independent retailers aren’t entirely sure what kind of an outlook to have for the season though, with 40 percent of respondents saying they expect holiday sales to be equal to last year and the remaining 60 percent of respondents divided evenly for positive and negative outlooks.

“As Kentucky’s economy has been slow to recover, it is interesting to see that while retailers aren’t sure what to expect about sales this holiday shopping season, the majority are willing to increase their inventory this year,” stated Sarah Rowlette, KRF Director of Communications.

Despite the hustle and bustle around Black Friday and what used to be the “kick off” of the holiday shopping season, independent retailers expect to see less than 25 percent of their holiday season sales made during the Thanksgiving weekend.

Kentucky Retail Industry Provides Career Opportunities and Competitive Wages

KRF Retail Industry Survey Shows Increase in Jobs

Results of a recent Kentucky Retail Federation member survey found that approximately 14 percent of respondents created full-time positions so far this year. Full-time retail job creation for 2015 rose 5 percent over the spring of 2014. Likewise, the creation of part-time positions increased by 3 percent over the spring of 2014 with 9 percent of retailers creating new part-time jobs.

Kentucky’s retail industry provides more jobs than any other industry in the state. Job creation stands as a strong indicator for an improving economy and while the state’s economic outlook steadily recovers, talk of a government imposed wage hike intensifies. Those in favor of increasing the minimum wage often argue that employees only receive raises when there is a state-mandated increase, consequently implying that these individuals are unable to increase their skill level and related wages without the government’s involvement. A study from the Employment Policies Institute has dispelled this notion using over two decades of Current Population Survey (CPS) data showing the majority of employees starting at minimum wage earn a raise within their first 12 months on the job.

A recent national study by the National Retail Federation (NRF) Foundation shows full-time retail careers pay wages highly competitive with other sectors. This coincides with KRF’s recent survey questions about wages paid. One-fifth of Kentucky Retail Federation members reported starting wages for their entire staff at $10 or more per hour while 44 percent of members reported paying more than half their employees over $10.10 per hour. Additionally, 15 percent of members reported paying at last half of their staff $15 or more per hour.

“Threat of a minimum wage increase was among the top five concerns of our survey respondents,” Tod Griffin, KRF President explained. “While many are already paying well over the current minimum wage, increasing the entire wage scale would certainly have a financial impact on the business community.”

According to the NRF, $14.9 billion was directly added to the Kentucky economy in 2013 by the retail sector including restaurants. These companies provided 401,000 jobs in the state – one in six jobs – more than any other sector. The industry also indirectly supports other jobs in the state; for every 1,000 Kentucky retail jobs, another 391 jobs are created in other sectors.

KRF Hires Former Staffer to Improve Value of Membership

Cassie Grigsby Named Senior Vice President of Operations and Development

The Kentucky Retail Federation recently rehired a former staff member, Cassie Grigsby, in a newly created position that will focus on improving service to the Federation’s membership. Grigsby served the Federation for almost eight years, most recently as the Vice President of Finance and Development.

Cassie Grigsby, KRF Senior VP, Operations & Development

Cassie Grigsby, KRF Senior VP, Operations & Development

In her new role as Senior Vice President of Operations and Development, Cassie will oversee marketing, member service development, and daily business operations. Cassie will also serve as President of the Kentucky Retail Federation Insurance Agency.

In addition to the numerous initiatives in her new role, Cassie will be laying the ground work for an education foundation under the scope of the Kentucky Retail Federation. The foundation will open doors to research and data previously unavailable to the Federation as well as take on new initiatives that will advance the retail industry in the commonwealth.

“The Federation is adapting to the needs of its members,” Grigsby said. “Enhancing the Federation’s programming and further developing services that provide real value for members is a priority of this new position. I am excited to be back on board in this new role and serving retailers throughout Kentucky.”

Kentucky Retail Federation Names New Board Members and Officers

The Kentucky Retail Federation recently elected officers and directors at their annual board meeting. Ed McCoy, Vice President of Kerr Office Group based in Elizabethtown, is the 2015 KRF board chair. Serving as chair-elect is Travis Doster, Senior Director of Public Relations of Texas Roadhouse headquartered in Louisville. New directors include Cherie Hacker and Brian Lacefield. Hacker is replacing Becky Dedman as a representative of Walmart on the board. As Wayne Hunt of H&R Agri-Power finishes his term, Lacefield has stepped up to fill his place and represent Hopkinsville Elevator Company.

Cherie is a market manager for Walmart and has been with the company for 19 years and has a total of 29 years of experience with the retail industry. Cherie resides in London and was named Market Manager of the Year for Walmart Region 23 in 2013.

Brian is chief financial officer for Agri-Chem, LLC and general manger of Commonwealth Agri-Finance for the divisions of Hopkinsville Elevator Company. Brian has eight years of experience in banking and lending and three years of experience in farm inputs and supplies.

Current directors re-elected to serve another two-year term are Bruce Pierratt, Pieratt’s Furniture and Applianc, Lexington; Gary Elliott, Break Time Vending, Corbin; Buddy McCaffery, Walgreens, Louisville; Don Thomas, Southern States Cooperative, Herndon; Nancy Horn Barker, Horn’s BP Convenience Store, Winchester; Donald Riley, Clinic Pharmacy/Riley-White Drugs, Bowling Green; John Blankenship, Lowe’s, Elizabethtown and George Cunningham, Director Emeritus, Danville.

“We are excited to have Cherie and Brian on the board and look forward to working with them as they bring much expertise to the table,” Tod Griffin, KRF president said. “The Federation is pleased to have an exceptional group of retail industry leaders serving on the board again this year.”

Another Tax… Coming to a Town near You?

The Kentucky State Senate is poised to consider a new tax that will reportedly put a half a billion dollars in the coffers of county and city governments across this commonwealth.

Interestingly this new tax is not being portrayed as a tax at all, but is being called a “choice” by the proponents which include many Republicans who supposedly don’t like new taxes. They portray this tax as a “choice” because they’ve been sold on the idea that local voters get to choose to tax themselves in order to pay for projects in their own communities.

But the only way that could be true is if the vote was conducted at the cash register. The reality is that many customers will end up paying for projects they didn’t vote for and don’t get to use. If you live out in the county and it’s the city levying the tax, you will not get to vote. Likewise, nor will voters in rural communities that go to bigger cities to shop have any say; they will only get to pay.

From a retail standpoint, this approach causes several concerns. The first is that adding a local sales tax to different localities across the state creates a collection nightmare for the retailer. Keeping up with different taxing rates between different cities and counties is going to be problematic for those folks who deliver goods, not to mention putting retailers at a competitive disadvantage with their neighboring retail shops in the next county over with a different sales tax rate. Raising the complexity of the taxing structure eventually raises consumer prices in the end.

We also know that sales taxes are transient in nature and consumers soon learn to avoid higher taxing districts in order to save a dollar or two. You only have to look at the increase in online shopping in recent years or the success of a sales tax holiday in Tennessee and other states to see that.

This new tax increase will cost retailers and other businesses as well as major manufacturers that Kentucky sorely needs, in increased energy costs because, unlike residential users, the commercial businesses pay sales tax on utilities. A one percent hike in utility rates could be staggering to big users in this state. Businesses also pay sales tax on many goods and supplies they buy to run their business. As a matter of fact, business-to-business sales bring in one-third of the state’s sales tax revenue every year.

The amount of money this new tax will raise is staggering, over $500 million dollars each year. Kentucky businesses will end up paying for one-third or $165 million of this new tax and consumers will shoulder the rest. Taking a half a billion dollars out of the economy is not without negative consequences on the commonwealth’s tax revenue, consumer spending, and future business expansion (new jobs).

Contact your senator today and ask that they vote NO on HB1 by clicking HERE.