The library on the former grounds of the Highlander Folk Center, in which Rev. Martin Luther King once lectured, is one of few buildings remaining on the Grundy County site closed by the state in 1961. (John Partipilo/Tennessee Lookout)

This much is not in dispute:?? In 1961, the state of Tennessee took 200 acres of land from Highlander Folk School on Monteagle Mountain in Grundy County. Took, as in confiscated on bogus charges of alcohol sales without a license.

But the real reason for the confiscation stemmed from fears of civil rights and union activism after two decades of training now-icons such as Rosa Parks and Diane Nash at Highlander.

This much is also not in dispute: Five plots of that now subdivided land are owned by a nonprofit called the Tennessee Preservation Trust (TPT). The sale of those plots to Todd Mayo, the for-profit owner of The Caverns, a rural concert venue, is pending. And the current Highlander administration, which had its offer to buy the land rejected, is furious.

Everything else — what happened to TPT, whether they ever had plans to sell the land back to Highlander, what might happen to those plots now and the land next to them that TPT doesn’t own — well, the answers vary depending on whom you ask.

On the one hand, TPT preserved some historic buildings that might very well have been lost. On the other hand, the original (and some would say, still rightful) owner of those buildings has been shut out from determining what happens to them.

Still others question whether a group of white men are the right ones to tell the story of the storied civil rights training ground.

“It’s hard to understand what the motive would be for the Trust not to turn the land over to Highlander,” says Denis Marlowe, a longtime neighbor whose mother worked at Highlander before the state raid. “I can see it only one or two ways. Either you’re getting a chance to make some money in this situation, or you don’t agree with what Highlander might do with it.”

Backed by Eleanor Roosevelt, training civil rights leaders

Over three decades, the tiny Highlander Folk School had a huge, outsized impact on both Tennessee and American history. In 1932, Myles Horton, Don West and James Dombrowski launched the Highlander Folk School on land donated by Lillian Wyckoff Johnson, a progressive educator. Johnson had built and run a model rural school and community center named Kindred Company (KinCo) since 1915 and wanted others to continue her work after retirement.

Attempts to organize local workers quickly drew the ire of businessmen, both in Grundy County and across Tennessee. Although then-First Lady Eleanor Roosevelt had endorsed the school, by 1941 the FBI had launched its first investigation into Highlander for alleged communist activities, surveillance that would continue for over two decades.

By the 1950s, Highlander had pivoted from labor to civil rights and became an instrumental part of the movement to fight segregation. Workshops led by activists Septima Clark, Esau Jenkins and Bernice Robinson taught Black citizens their rights, while other workshops taught white and Black adults together strategies to desegregate schools and businesses. (Parks famously attended a Highlander workshop four months before refusing to give up her seat on a Montgomery bus.)

Martin Luther King Jr. visited in 1957, speaking in the library. Horton’s wife Zliphia taught “We Shall Overcome” to Pete Seeger during a visit, who made it part of his repertoire, leading to its adoption as the unofficial civil rights anthem.

‘A story that hasn’t been told’

In 2013, in a splashy story in The Tennessean, historian David Currey announced big plans: The Tennessee Preservation Trust (TPT), of which he was then board chair, planned to buy 13.5 acres of the original 200-acre Highlander site with a $1 million national campaign.

“Trying to get our hands on this piece of property allows us to tell that story again in the context of this rural setting,” Currey told the paper at the time. “This place has the potential to tell a story that hasn’t been told.”

A national campaign never really happened, but local donors stepped up and helped TPT buy three parcels on Old Highlander Road in May 2014. One parcel included what was left of the historic one-room library. In 2015, TPT purchased another parcel, followed by a fifth parcel in 2019 — ultimately around 8.5 acres of land with three houses in addition to the library.

Two of the houses have been rentals for the past 10 years. The third house, a historic home used by Highlander, has been left empty. It has visible mold and other exterior damage — rotting floorboards on the porch, a gutter dangling, overgrown shrubbery trying to force its way inside.

Despite some renovations, the one-room library sits empty, too, paint already peeling off the cement blocks. That’s why the organization needs to sell now, says Phil Thomason, TPT board chair, who says the organization never intended to keep the property.

“Our intent when we purchased it in 2014 was to restore the building back to its original design listed in the National Register of Historic Places and then sell it to a person, a benefactor, or an entity that we felt would be a really good steward of the property,” says Thomason.

That steward, however, won’t just be Todd Mayo. It will also be Currey, via a separate nonprofit called Kindred Cooperative in a nod to the original land owner. Last summer, months before Mayo put an offer on the land, Currey’s TPT entered into a 99-year lease of the Highlander property with Kindred for a nominal annual rent. (Thomason says it’s “something like” $1 per year.)

Mayo says he was intrigued by the project when Currey approached him.

“David communicated to me that he borrowed money to save this [property] and put it in a trust through TPT, but that … it needed to be sold and put into his nonprofit to carry on doing things there,” Mayo says. “I said, ‘Man, I’d love to help’.”

The TPT board voted to approve the sale for $600,000 in December 2023. Highlander put forth a competing offer of $800,000 cash in June, but the board voted against it.

“The relationship that we had with Highlander was severed a couple of years ago by them … and they disparaged and had unkind words for my organization,” Thomason says. “[Before 2024] we always had the door open to them for an offer, but we never received anything in writing …. [This summer] as we looked at the offer that Highlander presented, the timeline and other considerations just made it imperative that we move forward with Todd’s offer.”

Per state law, the Tennessee attorney general’s office must approve any sale by a nonprofit of substantially all its assets to another entity. That review is currently underway, and if the AG’s office approves the sale, which Thomason seems confident will happen, Mayo will own the land by the end of the year.

The role of race in historic preservation

Ted Debro, a Black Birmingham businessman, worked with Currey to create an experience room in the basement of the 16th Street Baptist Church, examining the aftermath of the 1963 bombings that killed four Black girls.

“We were very pleased with the work that he did, and I found him to be a very open and caring individual and one who really understood the story and how to pull that together,” Debro says. “I didn’t find him to have a prejudice or a racist thought in his body.”

But several people, including Highlander’s current co-executive director, Rev. Allyn Maxfield-Steele, raised questions about whether an older white man is the right person to tell Highlander’s story, given its storied history in the Civil Rights Movement.

“As another white person, I’ve grown to understand that we’re all in recovery from the deepest, entrenched pools of white supremacy that we grew up in,” said Maxfield-Steele. “But the deals that he’s been willing to seemingly make without our consent and without our blessing and without transparency — that’s the issue. And some people do call that white supremacist business practice.”

This attitude is what enrages Currey.

“That’s what [Highlander staff] use when they don’t get what they want — if you don’t agree with them, then everybody’s a racist,” Currey says. “That’s not the case. I do a lot of work with a lot of African American communities around the South. Do you think if I was a racist they would want to do business with me?”

A simmering fight for years

This anger — of Currey and Thomason toward Highlander, of Highlander toward the TPT — first came to a head in 2022, but it had been simmering for years.

Highlander didn’t stop training activists when the center was forced off Monteagle. Now called the Highlander Research and Education Center, it’s been located in New Market, Tennessee, since 1971, after 10 years in Knoxville. The organization has continued to train grassroots organizers and work for social and economic justice, and if it ever ended up with the original land, they say that goal wouldn’t change. But Highlander now has resources they didn’t have in the 1950s — over 50 employees and an annual operating budget of around $9 million.

According to Maxfield-Steele, Highlander has been interested in reacquiring the site and has talked to Currey and TPT members multiple times over the past decade about making it happen.

“In 2014, what we said was that we can’t afford this now, but we believe this project is valuable, and our story is one that should be told by us,” says Maxfield-Steele, explaining that Highlander was in the middle of a capital campaign at the time and couldn’t afford any additional cost outlays. “That was not something that it seemed that they were interested in pursuing.”

Between 2014 and 2019, Highlander had occasional discussions with Currey about the site’s direction but never received any offers in writing. In 2019, Howell E. Adams Jr., a donor who helped TPT purchase the parcels, told Highlander about the Kindred proposal. Maxfield-Steele thought parts of it were ludicrous — both “historic Highlander” and the current iteration of the nonprofit have long worked to “help rural people” — but he agreed to work on a plan.

But after emails back and forth, Maxfield-Steele says they couldn’t get a commitment from Currey about what would happen with the land. The pandemic hit, and things quieted down until 2022, when TPT submitted an application to place the library building on the National Register of Historic Places without notifying Highlander.

“There were citations that were wrong,” Maxfield-Steele says. “And we had never given any legal permission to TPT to submit anything.”

The dispute made the news, but behind the scenes, Highlander made an offer to buy the land.

“We said, we could cut you a check today,” Maxfield-Steele says. “And we offered to compensate [Currey] for his time in 2022.”

Thomason says TPT never received an offer.

“The fact that they objected to [the Register nomination] just told my board that they were not serious and would never provide an offer,” Thomason says. “Were there some minor inaccuracies? That’s correct. And those were corrected.”

Since then, the two parties have not talked until Highlander learned this spring that Mayo had made an offer for the land. Staff drafted a counter-proposal and attached letters of support from prominent historians, activists and Grundy County neighbors, including Tennessee State Historian Carroll Van West. They also included information about partnering with MASS Design Group, the architectural firm that designed the National Memorial for Peace and Justice honoring victims of lynching in Montgomery, Alabama.

Highlander provided financial documents demonstrating that paying $800,000 cash for the site — again, $200,000 more than Mayo and much more than TPT originally paid for the land — was feasible. The board still voted against the plan.

“On paper, it looks weird that they would turn down a significantly higher dollar amount, but it also looks bad that they would reject an 87-page document that included Septima Clark’s family, MASS Design, Brent Leggs of the National Trust for Historic Preservation, Black Tennessee historians, and reputable folks from the region and outside the region,” Maxfield-Steele says.

Learotha Williams, a Tennessee State University professor and historian, was one of the supporters who submitted a letter, and he sees racism at play, whether intentional or not.

“The preservation space that we work in is largely dominated by white males who have access to all of the properties, all of the mechanisms for preserving stuff, determining what was going to be preserved, how it was going to be preserved — in other words, who could tell the stories,” Dr. Williams says. “I can see the shock and anger emerging out of [the Register dispute], but nonetheless, this act is an act to punish Highlander, the same way that the sheriff said, ‘We’re going to punish Highlander by not allowing them into this site.’

“I don’t see much difference between the two,” Williams says. “You don’t want them there, so we slap a padlock on it in the 1960s. You don’t want them back at the site now because they called you out for some nonsense, so we don’t wanna sell it to you no matter how much money you got.”

Tempers are unlikely to calm anytime soon. Currey expressed repeated outrage over being perceived as elitist and not knowing what’s best for the land. Meanwhile, Highlander did not know that TPT had entered into the 99-year lease months prior to Mayo’s offer until told by this reporter, and now feels even more betrayed.

“That TPT invited us to make an offer without disclosing a century-long lease which essentially voids ownership is deeply deceptive and only confirms what we feared all along — this was never a genuine invitation,” says Evelyn Lynn, special projects organizer at Highlander.

Thomason, Currey and one member who spoke on background were the only TPT board members who agreed to talk. None of the other eight current members, nor several past members, returned calls or messages.

Potential problems with Kindred and the appearance of a sweetheart deal

There are multiple problems with Kindred potentially running the site, at least as the nonprofit currently exists. The first appears to be a conflict of interest: Not only has Currey been an off-and-on member of the TPT board since 2010, but he also partners with Thomason professionally via his historic preservation firm, Thomason & Associates. The firm’s website states that Currey’s company, Encore Interpretive Design, has provided “planning and interpretation services” for multiple projects.

And Currey is still intimately involved in TPT. Since the 2017 reporting year, he has filed every annual report with the Tennessee Secretary of State’s Office and since the 2018 reporting year, his home address has been listed as TPT’s mailing and principal office address.

“It is [my address] because I filed their annual report for them, because I used to be on the board,” Currey says.

Currey’s home address is also listed on all of Kindred’s annual reports.

Both federal and state law say conflicts of interest should be avoided, but they are not technically prohibited.

“When an organization makes a decision that is clouded by conflict, there’s a reasonable concern that that decision was not made in the best interest of the general public,” says Eric Franklin Amarante, a professor and expert in nonprofit law at the University of Tennessee Knoxville who has consulted with Highlander. “If someone is still somewhat involved or maybe even intimately involved in the organization, but they don’t maintain the title, that’s still a concern.”

Then, there are questions about the nonprofit status of TPT and Kindred. Currey says he created Kindred to raise funds because TPT lost its nonprofit status during the COVID era.

“(TPT) didn’t file some tax returns, and their board chair passed away from cancer — I was not on the board at that time — so we created Kindred so that we could finish the [library renovation], says Currey.”

But his timeline is a little off. TPT did have its 501(c)(3) status revoked by the IRS in 2020 for failure to file an annual report for three years in a row, and it has not regained it. However, Currey filed to incorporate Kindred in 2017, and in July 2019, he announced that TPT planned to turn the site over to Kindred to manage.

In 2021, the IRS granted Kindred tax exempt status, but the nonprofit appears to have not been in compliance with state or federal law since 2017. According to the IRS, Kindred has yet to file the required Form 990 annual report for any year, possibly bringing it to the verge of also possibly having that status revoked. It also has not had a board of three people in place, as required both by state law and its own charter.

In annual reports filed with the state, Currey is listed as both the president and secretary of Kindred for 2017 and 2018. From 2019 through 2023, Nashville architect Brian Tibbs is listed as the board secretary. In a phone call, Currey said Tibbs is still on the board. Tibbs, however, says, “I haven’t had any involvement with Kindred.”

Thomason said he was unaware of Currey’s lapses and blamed it on his lack of time.

However, Amarante says none of this looks good.

“If I were counseling the client, I would say, ‘This is a big transaction, basically all of your assets.’ And I would want to make sure that the entire transaction was clean of any self-interest,” Amarante says. “I’ve seen conflict-of-interest policies where the relationship described would not be technically considered a conflict, but if I were working at the IRS or state AG’s office and I were reviewing it, I’d be like, ‘This just looks like a sweetheart deal.’”

The form required by the AG’s office to approve the sale requires a nonprofit to “provide sufficient documents to identify any possible conflict of interest, self-interest, or self-dealing of any board member, officer, or director in connection with the Transaction.”

The future of Highlander

Whether Kindred, Mayo or Highlander end up controlling the lots, one thing seems sure: It will likely take significantly more money and additional land purchases to create a destination landmark that draws tourists from outside the state.

Mayo says his current vision isn’t to change much: Have elementary school children occasionally come by for a field trip, but otherwise keep it a quiet residential street where everyone minds their own business. The sale includes a preservation easement, which limits what can be built on the property.

“I haven’t spent a lot of time thinking about that,” Mayo says when asked if additional purchases could follow in the years to come. “You’d have to look at it relative to the cost and the benefits. … I plan on keeping everything the way it is for right now.”

Mayo says that he would like to restore the dilapidated home if it’s financially feasible. He may look into buying the house just south of the library, which will likely be on the market next year. He also plans to let the tenants in the other houses stay, at least for now.

Although he hopes Highlander ultimately gets their land back, Marlowe has a pragmatic take.

“This whole thing has been almost like a fantasy, as far as having the property saved and preserved,” Marlowe says. “If we’ve learned anything in the last 70 years of fighting these fights it’s just the fact that you’re there fighting doesn’t necessarily mean that the earth’s going to be shook up and changed any time soon. What’s important is to not lose sight that they were fighting.”

Lynn puts it more succinctly.“David Currey won’t be here in 99 years,” Lynn says. “But the Highlander Center will.

This story is republished from the Tennessee Lookout, a sister publication to the Kentucky Lantern and part of the nonprofit States Newsroom network.

Hazard, the Perry County seat, on March 26, 2024. (Photo by Austin Anthony)

The Eastern Kentucky city of Hazard is facing another legal obstacle in its effort to begin collecting a restaurant tax.

Attorney General Russell Coleman is appealing a Franklin Circuit Court order that said Hazard was eligible to? pursue the tax. He called it “an unlawful tax” for the city of about 5,200.

The restaurant tax, created by the state legislature in 1980, is levied in about 50 of Kentucky’s 418 cities on retail sales of food and beverages in all restaurants in the city. The tax rate is not to exceed 3% and revenue from it is to be used to promote tourism.

Hazard sued the state, claiming it was being discriminated against by not qualifying to enact the tax. Franklin Circuit Judge Phillip Shepherd last May ruled in favor of Hazard, opening the door for it and other communities to join the list of those imposing the tax. He ordered the Governor’s Office of Local Government to include on the list of cities eligible to impose the restaurant tax “all similarly situated cities” under the population of 8,000 like Hazard.??

At the request of Hazard, Shepherd amended his order on Aug. 15 to say it applies only to the city of Hazard “and has no broader application (to other cities) because this suit is not a class action suit.”??

The judge also deleted his previous requirement that the Governor’s Office of Local Government must include a list of other cities eligible to impose the restaurant tax.

Ed Jones, a Paducah attorney who is representing Hazard, said the city sought the amended order. “Ours was not a class action suit. We thought it should only apply to Hazard and the judge agreed with us. We talked to some cities about joining us earlier but they decided not.”

Other cities interested in imposing the restaurant tax now must start their own legal challenge if they want to pursue it, he said.

Morgain Patterson, director of municipal law for the Kentucky League of Cities, agreed.

She said the judge’s order last spring purported “to expand the number of cities that can assess the restaurant tax on a prospective basis, but the language of the ruling is unclear as to which cities that may include, except that it specifies the city of Hazard is eligible.”

“Now the judge has dropped from his initial order any other city besides Hazard from seeking eligibility for the tax,” she said late last week.

She said the judge’s initial and amended orders “preserved the right of cities that currently assess a restaurant tax to continue to do so.”

Shepherd’s amended order on Aug. 15 was good news for Hazard until Attorney General Coleman a few days later decided to appeal Shepherd’s ruling to the Kentucky Court of Appeals.

“We were ready to go with the tax but the attorney general’s appeal has stopped it for now. We hope this is only temporary and we can proceed with the tax,” said Hazard Mayor Donald “Happy” Mobelini. “I really don’t understand the reason for the appeal.”

Coleman said in a statement, “The Attorney General’s office will continue to defend the statute and oppose attempts to impose an unlawful tax.”

In his appeal filed Aug. 19, Coleman said allowing Hazard to implement a restaurant tax now is “a recipe for confusion given that this court (the Court of Appeals) might reverse the circuit court’s judgment.”

He said the appellate court should stay — or put on hold —? the circuit court’s judgment while the state’s appeal is continuing.?

Neither Gov. Andy Beshear or the state Department for Local Government were parties in the lawsuit.? Both were dismissed by an agreement to follow any court order entered in the case, said department spokesman Logan Fogle.?

?In his ruling last spring, Shepherd took issue with parts of a state law — KRS 91A.400 — that say which cities may impose the tax.

Before 2015, Kentucky’s cities were divided into six classes based on their population at the time of classification. There were more than 400 classification-related laws on the books that affected issues like public safety, alcoholic beverage control and revenue options.

After Jan. 1, 2015, that classification of cities was changed, making Louisville and Lexington 1st-class cities and others home rule class.

The amended restaurant tax law allowed the state Department of. Local Government to maintain a list of “authorized cities” that as of Jan. 1, 2014, were classified as cities of the 4th- or 5th-class.

The law said in addition to a 3% transient room tax placed on lodging, the legislative body in an authorized city could levy a tax on tourism.

Shepherd said the restaurant tax law makes an unconstitutionally arbitrary distinction of cities eligible to enact the restaurant tax based on population and classification status on an arbitrarily chosen date, Jan. 1, 2014.

The judge added that the law “fails to provide a pathway to correct the misclassification of cities like Hazard, whose population has always met the statutory criteria for belonging in the 4th class (with the authority to enact the restaurant tax) rather than the 3rd class.”

But Shepherd declined to hold all of the law unconstitutional, especially in light of the financial reliance some cities have on the tax.

He noted that many tourism projects have been funded by cities authorized to levy the restaurant tax and that many bonds are financed using proceeds generated by the tax.

Canoeing the Green River is one of Mammoth Cave National Park's many above ground attractions. (National Park Service)

Mammoth Cave National Park is famous for what’s below the ground, featuring the world’s longest explored cave system with hundreds of miles of passages and a unique ecosystem of fish, insects, worms and crustaceans. But it’s what’s happening in the air above the cave system that has Kentucky environmentalists concerned.?

Mammoth Cave is one of the country’s haziest national parks, says a national group dedicated to conserving the parks. Environmental groups say a Kentucky plan being drafted for controlling the air pollution that causes haze falls short — criticisms state officials largely refute.

Haze is tiny, airborne particulate matter that can obscure outdoor visibility. It can be created from natural sources such as wildfires but largely comes from man-made sources, such as emissions from motor vehicles and power plants. This pollution can impact people’s health by aggravating asthma, reducing lung function and leading to heart problems. It can also negatively impact wildlife.

“We’re seeing more of these haze pollutants depositing into the soil and the water and impacting wildlife, because they eat a lot of things that are in the soil and in the water,” said Natalie Levine, the senior manager for clean air and climate programs at the National Parks Conservation Association (NPCA), the group that analyzed haze pollution in national parks.?

According to the NPCA, the large majority of that haze drifting into national parks is man-made. And at Mammoth Cave, more than 70% of pollution contributing to haze is coming from electricity generation — specifically coal-fired power plants.?

Smokestack emissions from coal-fired power plants contain toxic gasses sulfur dioxide and nitrogen dioxide, which can react with water and other atmospheric gasses to become acid rain that acidifies water and soil and harms the wildlife that rely on them. Excess nitrogen and sulfur from these gasses can be deposited into the soil and water through acid rain or by settling onto surfaces through the air, potentially killing and inhibiting the growth of trees and other plants.?

“We are concerned about our national parks. We’re concerned about their biodiversity. We’re concerned about hazy skies and giving people the best outdoor experience possible. But we’re really talking about the health of the communities as well,” said Julia Finch, the director of the Sierra Club’s Kentucky chapter.

A spokesperson for Kentucky’s environmental protection cabinet, however, says its efforts to reduce haze “are significantly reducing emissions”? and that air quality around the national park is better than national standards.?

John Mura, a spokesperson for the Kentucky Energy and Environment Cabinet that houses the Division for Air Quality, in a statement said the state is committed to working with federal agencies “and other interested parties to ensure the cleanest air quality possible for our citizens by understanding and addressing the emission sources that are contributing to visibility issues at Mammoth Cave National Park.”?

Slow improvements in haze

Haze protections for national parks date back to the establishment of the Clean Air Act in the 1960s and the additions and amendments added to it over the decades,?

In 1999, the U.S. Environmental Protection Agency (EPA), empowered through the Clean Air Act, issued new regulations requiring states to develop regional plans to reduce haze in national parks and control the pollution sources contributing to it. Such regional plans, for example, could require coal-fired power plants to install smokestack scrubbers or controls to filter out sulfur dioxide and nitrogen dioxide emissions. The long-term goal of the plans is to return national parks to their original natural visibility by 2064.?

But there have been a number of delays in getting states to submit these plans, Kentucky included. The EPA required the first version of these plans to be submitted by the end of 2007; Kentucky did, but 37 states did not. Progress reports on how states are meeting goals set in their haze plans are due every five years, and new versions of the regional haze plans are due every 10 years.?

The EPA set another deadline for states to submit their second version of regional haze plans in July 2021, a deadline that Kentucky and 14 other states did not meet. Kentucky is now trying to submit a new draft haze plan for the EPA to consider by a new deadline of Sept. 29 under the potential threat the EPA could step in and create its own haze plan for Kentucky.?

State officials say Kentucky’s first regional plan has decreased the state’s sulfur dioxide emissions by 310,047 tons since 2008, and that air quality at the park is better than national standards.?

Data from the National Park Service (NPS) does show visibility and the impacts of acid rain and ozone at the park have improved in a little over a decade since the state’s first haze plan was submitted, though acid rain and ozone are still impacting wildlife and human health.?

Median visibility at the park only reached a “fair” classification as of 2021 after having “poor” visibility since 2009, according to NPS data. The amount of sulfur and nitrogen deposited into the park’s soil and water every year through acid rain and the air has decreased, though sulfur levels have decreased much more significantly than nitrogen levels.?

The levels of ozone, a reactive gas largely created from emissions from power plants and cars that can harm human health, have also decreased since 2009. Ozone impacts to vegetation in the park are rated at a “good” level but remain as only “fair” for human health, according to the NPS.?

Environmentalists say more should be done

Even with that progress, environmental groups including the Kentucky Chapter of the Sierra Club and the Kentucky Resources Council, say the updated haze plan Kentucky is considering doesn’t do nearly enough to reduce air pollution impacting the park through haze and acid rain.??

These environmental groups say only two coal-fired power plants — the Tennessee Valley Authority’s Shawnee Fossil Plant in McCracken County and the Big Rivers Electric Corporation’s D.B. Wilson Generating Station — were analyzed by the state as potential sources of haze pollution in the draft plan when over a dozen more pollution sources including other power plants and industry are also contributing to the haze.?

Among the two power plants analyzed, these groups say, the state decided to not require any additional emissions controls to reduce nitrogen dioxide and sulfur dioxide emissions from the plants. The groups say state officials also only accounted for controlling sulfur dioxide emissions and not nitrogen dioxide emissions, which also can create haze.?

“In the excluded list were five coal plants and nine other industrial facilities, including those with aluminum and metal smelter operations, oil and gas operations, and lime and cement operations,” said Audrey Ernstberger, a lobbyist with the Kentucky Resources Council at a public hearing on the draft haze plan last month.

Ernstberger said the result, according to KRC’s analysis, is that more than 82,000 tons of haze pollution will still be released under the draft plan.?

In Kentucky’s draft plan, state officials write that because the electric utility Big Rivers Electric Corp. had installed a device in November 2022 to control sulfur dioxide at its Wilson coal-fired power plant, a deeper analysis into potential emissions controls wasn’t needed.?

Officials also write that the emission levels of nitrogen dioxide coming from the Wilson and Shawnee plants didn’t exceed “screening thresholds” in the state’s modeling, so officials “did not perform any reasonable progress analyses” for nitrogen dioxide emissions.?

For the Shawnee Fossil Plant, Mura said the state worked with the Tennessee Valley Authority to modify its state air permit to limit sulfur dioxide from the plant to 8,208 tons per year starting in 2028. State officials chose that limit following a deeper “four-factor” analysis conducted into potential emission controls for the coal-fired plant.?

When asked by the Lantern why the state chose only the Wilson and Shawnee plants to analyze for haze pollution, Mura said the state used modeling to determine the plants were “significantly impacting Mammoth Cave National Park and that limiting SO2 emissions at these facilities would have the greatest impact in improving visibility in the region.”?

If Kentucky meets the September deadline for submitting a haze plan, the EPA could approve the plan as is, ask the state to make revisions or step in and make its own plan. A federal judge last month signed a consent decree directing the EPA to speed up action on haze plans submitted by 32 other states.?

Hilary Lambert, a former Lexington resident who led a New York-based water protection nonprofit, said at the July public hearing she owns a cabin in Green County less than 50 miles east of Mammoth Cave National Park. She echoed what she wrote in a Louisville Courier-Journal column saying the state needs to do more to curb pollution and ensure compliance with state and federal regulations.?

“It's the state's own, the commonwealth's only big national park, and it's a jewel for people to visit,” Lambert said at the hearing. “Please get up to date and bring a number of businesses into compliance with the law to clean up the air for everybody.”

The Kentucky Speedway is now home to Ford trucks awaiting distribution after NASCAR abandoned the track in 2020. (Kentucky Lantern photo by Tim Sullivan)

SPARTA — By the end of the year, the owners of Kentucky Speedway will have paid Gallatin County more than $900,000 for tickets never sold to races never run.

NASCAR abandoned the racetrack following the 2020 Quaker State 400, but a 20-year PILOT agreement (Payments In Lieu Of Taxes) obligates Speedway Motorsports Inc. to two annual payments through 2031: a $180,000 lump sum and a $1 per ticket fee with a $230,000 minimum, even if the venue remains vacant.

Which may well be the way to bet.

Set in a sparsely populated stretch along Interstate 71, far enough from both Cincinnati and Louisville to discourage repeat business from fans who encountered epic traffic, parking and weather problems as the track slowly got up to speed, Kentucky Speedway will mark the fourth anniversary of its last NASCAR race on July 12. The $178 million facility now serves mainly as a temporary home for the Ford Motor Company’s excess inventory and, in turn, as a long-standing frustration for Gallatin County Judge-Executive Ryan Morris.

“We should race in Kentucky,” Morris said. “We should race right here in Gallatin County. That’s my expectation. That’s what I want to see happen. I think it’s good for the community, brings people in, hotels fill up, campgrounds fill up, (generates) tax dollars.

“(But) If we’re not going to race, I don’t want that property to sit empty for another five or 10 years, just used as a parking lot. I want them to talk to us and economic development advisors that we have to market some of the ground for industry. Do you need 1,000 acres if you’re not going to race? Maybe 900 would be enough.”

Running on state subsidies

Though rumors persist that stock car racing may eventually return to Kentucky Speedway, they generally come with caveats. In calling for a return to more 1 1/2-mile tracks during his “Actions Detrimental” podcast last month, driver Denny Hamlin said, “Kentucky’s still out there,” but then added, “Kentucky is definitely not top-notch when it comes to facilities there. It needs — it would need some major work.”

And as NASCAR Chief Operating Officer Steve O’Donnell has pointed out in multiple form letters, the big-league stock car circuit is essentially a zero-sum game. Each addition requires a subtraction.?

“The annual assignment of specific racetracks is made on a highly competitive basis, and there is always competition among tracks in different states to obtain a second race (by removing a race from another facility),” O’Donnell has written. “Further, there is competition when a track is currently without a NASCAR race and desires to obtain one, which, due to finite supply of dates, would necessarily have to be taken from another state. In addition to the criteria described above, NASCAR obviously looks more favorably on facilities that, in addition, have the support of their state or local communities.”

Translated: government subsidies can help get you to the finish line.

Reviving stock car racing in Sparta would almost certainly entail poaching a race from another track and would likely require a political push and a funding mechanism not currently in evidence. While other states are providing multi-million-dollar incentives and infrastructure improvements to attract and maintain major motor races, Kentucky lags so far behind that it risks being lapped.

“As far as a pure war chest or bucket of money that we are tapping into, it doesn’t exist,” said Greg Fante, president and CEO of the Louisville Sports Commission. “We would love to see monies funneled into a bid pool allotment to get us in a more competitive spot statewide, but that’s going to be a long, hard trudge based on where we currently sit.”

The only incentive program available through Kentucky’s Tourism, Arts & Heritage Cabinet is the Tourism Development Act, which enables operators to recoup up to 25% of a project’s cost through refunded sales tax. Though Kentucky Speedway has twice been approved for refunds that potentially totaled more than $44.5 million, the actual payouts have been much more modest. Annual refunds peaked at $1.14 million in 2011 following the first Quaker State 400 staged in Sparta, but they subsequently fell sharply and steadily as attendance atrophied, hastening Speedway Motorsports’ decision to move the race to Atlanta.

Between 2011 and 2019, Kentucky Speedway realized $5.3 million in sales tax refunds, and just $353,000 in 2019. (COVID-19 caused the 2020 race to be run without spectators.) By contrast, Texas’ Major Events Reimbursement Program records show Texas Motor Speedway was able to extract $26.4 million in subsidies between 2016 and 2022.?

In North Carolina, home to multiple NASCAR races and most of the circuit’s race teams, the state’s Motorsports Relief Fund provided $45.8 million in grants to 17 racetracks in 2022, including an $18 million allocation that enabled small North Wilkesboro Speedway to land and retain NASCAR’s All-Star Race after more than a quarter-century of inactivity. According to a press release from the North Carolina governor’s office, the 2023 All-Star Race increased the value of the state’s economy by $42.4 million.

‘Still pretty raw about them pulling up stakes and leaving’

Whether Kentucky has the means, the motivation or the political support for policies that could provide similar incentives is at best unclear. Waving a caution flag is Andrew McNeill, president of the Kentucky Forum For Rights, Economics and Education (KYFREE).

“I’m not sure that the promised economic impact of NASCAR in Kentucky and that racetrack in Sparta has ever really delivered,” McNeill said. “I simply think over the long run, no matter the amounts or the duration of subsidy, there’s just a limited market for that race in that location to be successful.?

“I think they probably got a little bit over their skis in thinking what the market was for NASCAR racing in the country. I don’t see that there’s any reason to put together any type of subsidy package with the hope of bringing NASCAR back.”

Crystal Staley, spokeswoman for Gov. Andy Beshear, told the Lantern, “Supporting economic development and tourism growth is a top priority for this administration.” Still, Staley said Beshear had not been contacted by track owners or local officials.

“I feel like the state has done its part over a 20-year period to make (Kentucky Speedway) a first-class sports and entertainment destination and I’m still pretty raw about them pulling up stakes and leaving,” said Damon Thayer, the Kentucky Senate’s majority floor leader and a former Kentucky Speedway consultant. “I don’t think there needs to be any more incentive than what already exists.”

Thayer points to the widening of Interstate 71 along the approaches to Sparta and the completion of Kentucky 1039 to the Indiana line as proof of Kentucky’s commitment to the speedway’s success. Gallatin County’s industrial revenue bond with Speedway Motorsports spares the owners from paying property taxes through 2031.

“Speedway Motorsports just up and pulled out of Kentucky and took the race back to Atlanta with no warning, no explanation,” Thayer said. “So I don’t know why the taxpayers should be on the hook for bringing the place back to life when the owners decided to kill it in the first place.”

McNeill’s response to Thayer’s statements: “If Kentucky Speedway has lost Damon Thayer, they don’t really have anywhere else to go to get the General Assembly behind them.”

Leases with Ford, Amazon

Speedway Motorsports, which acquired Kentucky Speedway from a group headed by Jerry Carroll in 2008, declined an interview request from the Lantern, as did the track’s former general manager, Mark Simendinger. “At this time, we are not granting media interviews regarding Kentucky Speedway,” said Scott Cooper, the company’s senior vice president for communications. Instead, Cooper provided a prepared statement.

“Kentucky Speedway is a modern, multi-use facility which remains open to host music festivals, regional and national motorsports events, corporate entertainment and hospitality, driving schools, RV rallies and storage rentals,” it said.?“While there is not a major motorsports event on the calendar for the immediate future, the facility and property is well-maintained and is utilized for track rentals on an annual basis.”??

With 10 other racetrack properties that are all on NASCAR’s schedule, Speedway Motorsports does not appear to be feeling a significant financial pinch from Kentucky Speedway’s prolonged dormancy. The track is not known to be for sale and has been able to offset a significant portion of its overhead by leasing land to Ford and Amazon.

On a recent visit to the track, thousands of Ford vehicles were parked behind the speedway’s grandstand, awaiting distribution. And though the terms of Ford’s speedway deal are not public, a similar arrangement with a Ford subcontractor has generated more than $1.2 million over the last 10 years for the Kentucky Exposition Center.

Still, parked cars would not seem to be the highest and best use for a facility built for speed. Not indefinitely, at least.

“If it’s just not in the cards to race, it could be worse,” said Ryan Morris, the Gallatin County judge executive. “We’ve got 1,000 acres in that location filled with infrastructure. We’ve got water. We’ve got sewer. We’ve got electric, high-speed internet, access to the interstate, good roads in the area. . .

“The urgency for me is I don’t want it to sit idle. I know there are tracks that have sat idle for years and years and years and then they got a race back. I don’t want that track to sit there for 10 years.”

This story has been updated with a quote from driver Denny Hamlin.

A steam engine at the repair shop owned by the Kentucky Steam Heritage Corp. (Photo provided)

For Chris Campbell, Estill County is where almost everyone has a connection to the rail lines that run by the “twin cities” of Irvine and Ravenna, the latter founded by a railroad in the early 20th century.?

Campbell, while not an Estill County native, is a train enthusiast and president of the Irvine-based nonprofit Kentucky Steam Heritage Corp. that is trying to transform the county’s long-time rail yard into an “economic incubator” that can be a draw for his part of Appalachian Kentucky.?

The vision: turning the rail yard into a community greenspace, dubbed the “The Yard,” featuring a pavilion for music, a campground, jogging trails, a museum and a renovated repair shop where historic steam engines are restored. Campbell foresees thousands of people coming in for music shows, spending the night, spending money at local restaurants and stores, and visiting other Eastern Kentucky attractions.

The nonprofit is getting a big boost ?toward making that a reality in the form of a nearly $5 million federal grant announced this week to clean up the rail yard, remediating decades of industrial use from hauling coal out of Kentucky’s mountains.

Visitors to the new community space could help “a new economy spring up” on ground where the economy has long been based on coal mining and railroading, says Campbell.?

“None of these ideas can even come to fruition if you don’t do the literal groundwork to make it possible. So, the literal groundwork is moving dirt around and to make it legal to have the general public on it,” Campbell told the Lantern.?

The almost $5 million grant is from the U.S. Environmental Protection Agency’s Brownfields program, which has more funding to distribute thanks to passage of federal spending bills such as the Bipartisan Infrastructure Law. Two area development districts and the city of Barbourville also recently received grants through the program to assess properties and create an inventory of properties to be potentially remediated and restored.?

Campbell said the work already done toward the project — which includes a music stage that could start hosting music as soon as this fall — has been made possible through private donations and other state and federal funding in recent years.

Along with building that community space, Campbell said, those at the Kentucky Steam Heritage Corporation want to preserve the legacy of the region’s railroading into the future.?

A steam engine repair shop supplied jobs in Ravenna before trains moved to diesel-electric engines, and the nonprofit is restoring a 20th century steam engine that’s seen plenty of time in Kentucky. Campbell said the nonprofit, which owns the rail yard, ?hopes to acquire the tracks from CSX in the future to be able to bring tourists into town by train. He said trains occasionally come down the tracks if they need repairs but the runs are no longer regular.

“People that worked for the railroad were really passionate about it,” Campbell said. “We’re interested in the history of railroading and preserving it but also doing it in a way that’s marketable and has some longevity.”?

Campbell said the nonprofit, which owns the rail yard, ?hopes to acquire the tracks from CSX in the future to be able to bring tourists into town by train. He said trains occasionally come down the tracks but the runs are no longer regular.

Hazard, the Perry County seat, on March 26, 2024. (Photo by Austin Anthony)

A Franklin Circuit judge has given a legal victory to Hazard and several other Kentucky cities interested in imposing a restaurant tax.

The tax, created by the legislature in 1980, is levied in about 50 of Kentucky’s 418 cities on retail sales of food and beverages in all restaurants in the city. The tax rate is not to exceed 3% and revenue from it is to be used to promote tourism.

Hazard sued the state, claiming it was being discriminated against by not qualifying to enact the tax. Several other cities joined in the suit.

Hazard Mayor Donald “Happy” Mobelini on Wednesday said he was “elated” with the judge’s order and hopes that the city commission will take up implementing a restaurant tax at Monday night’s meeting. He said amenities that appeal to tourists can improve the quality of life for residents as well.

“I don’t think there will be a ‘no’ vote,” he said. “We’re in such a disadvantaged position here. We want to take care of our kids. We want to do for our kids what other communities are doing with things like recreational areas” that the mayor said will also draw visitors.

Logan Fogle, spokesman for the state Department for Local Government, said the court ordered the department “to take all necessary and appropriate steps to implement the order, specifically by including Hazard on the list of eligible cities to impose the tax and by including all similarly situated cities, like Ashland, on the list.”

Gov. Andy Beshear was dismissed from the case earlier by agreed order and the attorney general’s office intervened to defend the state.

Kevin Grout, a spokesman for Attorney General Russell Coleman, said Wednesday the office is reviewing whether to appeal the order.

Unconstitutionally arbitrary

Meanwhile, a director of the Kentucky League of Cities warned that no city should immediately try to impose the tax based on the Franklin Circuit Court ruling because it was not final.

In a 21-page decision issued Monday, Franklin Circuit Judge Phillip Shepherd took issue with parts of a state law — KRS 91A.400 — that says which cities may impose the tax.

Before 2015, Kentucky’s cities were divided into six classes based on their population at the time of classification. There were more than 400 classification-related laws on the books that affected issues like public safety, alcoholic beverage control and revenue options.

After Jan. 1, 2015, that classification of cities was changed, making Louisville and Lexington 1st-class cities and others home rule class.

The amended restaurant tax law allowed the state Department of. Local Government to maintain a list of “authorized cities” that as of Jan. 1, 2014, were classified as cities of the 4th- or 5th-class.

The law said in addition to a 3% transient room tax placed on lodging, the legislative body in an authorized city could levy a tax on tourism.

Shepherd said the restaurant tax law makes an unconstitutionally arbitrary distinction of cities eligible to enact the restaurant tax based on population and classification status on an arbitrarily chosen date, Jan. 1, 2014.

“The statute arbitrarily fails to provide a means of migration for cities whose population after January 1, 2014, either enters or exits throng of 4th and 5th class cities.”

The judge added that the law “fails to provide a pathway to correct the misclassification of cities like Hazard, whose population has always met the statutory criteria for belong tin in the 4th class (with the authority to enact the restaurant tax) rather than the 3rd class.”

But Shepherd declined to hold all of the law unconstitutional, especially in light of the financial reliance some cities have on the tax.

He noted that many tourism projects have been funded by cities authorized to levy the restaurant tax and that many bonds are financed using proceeds generated by the tax.

He said “the proper remedy” is to sever parts of the statute that violate the Kentucky Constitution’s prohibition on arbitrary legislation.

Those parts arbitrarily authorize some cities to impose a restaurant tax based on historical class and leave similarly situated cities without the ability to impose the tax.

The judge also ordered that the Governor’s Office of Local Government include on the list of eligible cities to levy the restaurant tax all similarly situated cities, like Ashland, with population ranges within the parameters of cities that had been classified 4th- or 5th-class.

Hazard and similarly situated cities with populations under 8,000 should be included on the list of cities eligible to levy the tax, the judge said.

“This ruling does not declare that those cities like Elizabethtown or Oak Grove, with current population totals over the 4th class population cap of 8,000 are no longer authorized to levy and rely on the tax,” said Shepherd.

He stressed that the Governor’s Office of Local Governments is directed to include Hazard on the list of cities eligible to impose the tax.

Shepherd said the state’s previous classification system for cities “is frozen in time based on population figures that have now changed or were initially misclassified.”

For clarity, he wrote, the now-repealed city-classification system directed that 3rd-class cities have populations between 8,000 and fewer than 20,000. Cities of the 4th class have populations of 3,000 or more, but fewer than 3,000.

Shepherd said Ashland maintains it has never had a population in this century or last that was as low 8,000, and it was misclassified.

Cities advised to proceed cautiously

Morgain Patterson, director of municipal law for the Kentucky League of Cities, said in an article on the KLC website that the cities of Bardstown, Beaver Dam, Berea, Elizabethtown, Kuttawa, Madisonville, Morehead, Pikeville and Prestonsburg intervened in the lawsuit as former 4th- and 5th-class cities eligible to assess the restaurant tax.

“These cities argued that the restaurant tax statute is constitutional and that invalidating it would cause catastrophe economic harm to those cities that impose the tax,” she said.

But, said Patterson, the judge’s order “purports to expand the number of cities that can assess there restaurant tax on a prospective basis, but the language of the ruling is unclear as to which cities that may include, except that it specifies the city of Hazard is eligible.”

She stressed that the order “is not final and should not serve as a basis for a city to adopt a new restaurant tax.”

Patterson said the order “clearly preserves the right of cities that currently assess a restaurant tax to continue to do so.”

She said the parties in the lawsuit have 10 days from the date of the order to file motions to alter, amend or vacate.

If a motion is filed, that extends the deadline for a party to appeal the decision, she said. Once the court rule on that motion, the parties have 30 days to file an appeal.

Hazard, along with Perry County Fiscal Court, filed the suit in ?January 2023. Shepherd dismissed Perry County as a plaintiff.

Judge’s order in City of Hazard v. Commonwealth of Kentucky

Gov. Andy Beshear, left, chats with quarterback Patrick Mahomes of the Kansas City Chiefs and Brittany Mahomes at the 149th running of the Kentucky Derby at Churchill Downs on May 6, 2023 in Louisville. (Photo by Rob Carr/Getty Images)

FRANKFORT —? Unlike his predecessors, Gov. Andy Beshear has declined to identify friends and political supporters who buy prime tickets to the Kentucky Derby made available by Churchill Downs each year for the governor’s guests.

The Louisville racetrack sets aside large numbers of Derby tickets for sale at face value to Kentucky elected officials, including hundreds to the governor’s group — many of them coveted hard-to-get prime seats.?

One purpose is to allow the state’s chief executive to entertain corporate executives considering investments in the Bluegrass State on that one day of the year when Kentucky shines in the national spotlight.

News articles about this time-honored practice over the past 25 years emphasized that Churchill Downs set aside far more tickets for the governor’s group than are needed by the state’s official corporate guests.?

Over those years, when asked by reporters, Beshear’s four immediate predecessors — including his father Gov. Steve Beshear — withheld the names of the official economic development guests but released lists of names of others who were able to buy the tickets from the governor’s batch. In each case, many of the tickets wound up in the hands of political donors, lobbyists and other supporters.

Those governors took some heat from ethics watchdogs who questioned why Churchill Downs — a major political contributor and potent lobbying presence in Frankfort — needed to give the governor control over enough hard-to-get tickets to take care of his friends.

But Beshear’s office says it has no lists of friends and supporters who got those tickets last year. Like his predecessors, Beshear has set-up a nonprofit corporation to broker his ticket allotment and manage his Derby events “for the promotion of economic development in the Commonwealth of Kentucky.”?

Beshear’s nonprofit — called First Saturday in May Inc. —? declined to say how many tickets it purchased from Churchill last year and declined to release records showing who it sold those tickets to.

Churchill Downs failed to respond to questions emailed to it by Kentucky Lantern and numerous follow-up emails and phone calls.?

Though Kentucky Lantern had no luck in learning from Beshear who bought tickets from his allotment in 2023, other public records show that a large number of tickets from the governor’s batch may have been purchased by his political supporters in the Democratic Governors Association.

‘Why are you not letting us know…?’

Norman Ornstein, an authority on ethics in government and emeritus scholar at the American Enterprise Institute in Washington, said he has no serious problem with the underlying story of Churchill Downs setting aside so many tickets for the governor’s group.

“My only question now would be: Why are you not letting us know what other governors have let us know?”? Ornstein said in a phone interview.

Delaney Marsco, director of ethics at the Washington-based Campaign Legal Center, had a similar observation. “If this sort of information is not released it raises an appearance that something nefarious may be going on,” Marsco said.

Demand for good Derby tickets exceeds supply, even as the face-value cost of tickets has soared in recent years.?

Doug Dearen, owner of DerbyBox.com a Kentucky Derby tour, travel package and ticketing business, explains on his company’s website, “Horsemen, corporations, families and government have had Kentucky Derby tickets in their possession for over 130 years, which makes this one of the most difficult tickets to obtain in all of sports.”

As such, many Derby fans must go online to the secondary market to buy tickets at prices set by sellers. (A Courier-Journal story on Monday said Ticketmaster listed the prices of reserved Derby seats that day “starting at $923 and selling upward of $10,781.”)

But six news articles over the past 25 years (by The Courier-Journal, Lexington Herald-Leader or Associated Press) reported that many friends of the governors over that era got their tickets at face value from the governor’s batch.

Those articles say that the practice of past governors has been — upon request of a reporter — to release the number of tickets allotted to him and the names of those who bought them. They released the names soon after the Derby arguing that any list of names released before the Derby was preliminary and subject to last minute changes. Also, news articles show Beshear’s predecessors declined to release names of the official corporate guests on the grounds that doing so could damage prospective negotiations.

Those news articles reported that Churchill sold as many as 553 tickets to the governors group while Paul Patton was governor in 1999, and as few as 237 in 2016 under Matt Bevin. In between, the number was about 360 tickets.

Kentucky Lantern filed a request under the Open Records Act with the governor’s office in August for documents showing the names of who got tickets for the 2023 Derby from the governor’s batch.

The response of Beshear’s office was the opposite of his predecessors: Beshear’s office released documents showing names of 38 official corporate guests of the state’s economic development and tourism agencies in 2023. But it said it had no lists of names of anyone else who bought the 2023 Derby tickets.

First Saturday in May, Inc.

Detailed information about who buys tickets from the governor’s batch is retained by First Saturday in May Inc. But its treasurer, Melinda Karns, refused Kentucky Lantern’s request to review its records that would show how many tickets it got in 2023 and who bought them.

Karns, a Lexington certified public accountant who is also treasurer of the Kentucky Democratic Party and was treasurer of Beshear’s campaigns for attorney general and governor, did release the group’s most recent tax return (Form 990) for its fiscal year ending Sept. 30, 2022. (That form showed annual revenues in 2021-22 of $820,057 and expenses of $758,531. But no names of Derby ticket buyers or donors to the nonprofit are on that form.)

In response to emails that pressed for specifics, Karns said in an email, “The Form 990 that we have provided to you shows the amount of money spent by the First Saturday in May on the Kentucky Derby. Additional tickets to the Kentucky Oaks and Kentucky Derby were privately purchased from Churchill Downs by the First Saturday in May at no expense to the Commonwealth.”

Democratic Governors Association

A disclosure report the Democratic Governors Association filed with the Internal Revenue Service last year shows that it apparently purchased many of those additional tickets.

The report shows that in early 2023 it paid $209,608 to First Saturday in May Inc. for “catering facilities.”

The Democratic Governors Association is a well-heeled national political fund dedicated to electing Democratic governors. The group’s priority last year was to reelect Beshear. It donated a massive $19 million to a super PAC called Defending Bluegrass Values that financed an independent campaign that helped Beshear win reelection in November over Republican Daniel Cameron.

DGA spokesman Sam Newton declined to say what exactly the DGA bought from First Saturday in May for $209,608. His emailed response to a question asking if the payment was for Derby tickets was that the money was for “a very successful event at the Kentucky Derby” that the DGA had hosted for several years.

Barren County boo-boo

The DGA’s involvement with Beshear’s 2023 Derby festivities briefly surfaced during the governor’s race last summer, causing some embarrassment to Beshear, the DGA, and especially for the Glasgow Barren County Industrial Development Economic Authority.

A disclosure form the DGA filed with the IRS listed the authority as a donor of $12,500, and that donation was included in news stories about donors to the DGA.

Officials of the authority board said during their August meeting that the donation was a mistake. The authority is partly taxpayer funded and barred from making political contributions, the authority’s chairman said.

Board member Larry Glass took responsibility. According to several news reports, Glass said he was approached by a person with connections to the Beshear administration and asked if he would be interested in representing Barren County at the governor’s Derby events where he could network with executives considering investment in Kentucky.

Glass said he was personally not interested, but suggested that it would be good for the board’s executive director to attend. Glass said he personally paid $12,500 to the authority — the cost for the executive director and her husband to attend the governor’s Derby Eve party, the Kentucky Oaks on the day before the Derby, and the Derby. The authority, in turn, wrote a $12,500 check to the DGA.

Glass told the Lexington Herald-Leader it was a mistake to funnel the money through the authority instead of paying the DGA himself. He said he could not remember who from the Beshear administration had approached him, but said he was not pressured to make the donation, the Herald-Leader reported.

The DGA later refunded the $12,500 to the authority, and an authority official said that amount was in turn refunded to Glass.

Republicans winning race for Churchill political dollars

Churchill Downs is a very big donor to political committees, and it backed Beshear’s reelection in a big way. More than 40 of its officials and employees combined to contribute $85,500 to Beshear’s reelection committees, and Churchill itself gave $275,000 last year to the DGA.

But Churchill and its executives have given far more to Republicans than Democrats in recent years, particularly to committees supporting incumbent Republican state legislators. And support of the Republican lawmakers was crucial in 2023 when the General Assembly passed a sports betting bill favorable to Kentucky’s racetracks and a bill to ban a game proliferating in parts of Kentucky — called a “gray” machine by opponents — that race tracks saw as illegal competition.?

This year alone Churchill has donated $200,000 to a political action committee called Commonwealth Conservative Coalition that is supporting mainstream Republican candidates for the legislature against their “liberty” opponents in upcoming ?primary elections. Also this year, Churchill has donated $100,000 to the Republican Party of Kentucky’s fund drive to renovate its headquarters in Frankfort.

Yes, other officials have access to Derby tickets

Churchill Downs has long made tickets available for sale to not just the governor, but also to all 138 state legislators, the statewide elected officials other than the governor, Kentucky’s members of the U.S. House and Senate and Louisville’s mayor.

Kentucky House Speaker David Osborne, a Prospect Republican, said each state legislator is given the opportunity to buy a box of six Derby seats. He sees no problem with the practice. “It’s the premier annual event in Kentucky and people expect state leaders to be there,” Osborne said. “… A more common reaction I get from people is that they are surprised to learn that we have to buy the tickets.”

Natural Bridge State Park in the Red River Gorge Wilderness Area in Slade, Kentucky. (Photo by ehrlif/iStock images/Getty Images

Over the past three decades, a state-managed fund has been a financial force behind the creation and expansion of parks, nature preserves and hunting grounds across Kentucky.?

The Kentucky Heritage Land Conservation Fund, established in 1990 to provide a consistent source of funding for local governments, state agencies, nonprofits and universities to protect land for recreation and preserving wildlife, has put into conservation more than 95,000 acres across the state.?

The fund helped add 118 acres to a local park in Lincoln and Garrard counties. It helped conserve threatened and endangered species of plants on state-owned nature preserves, including the white fringeless orchid in Southeastern Kentucky. And it helped Western Kentucky University purchase and protect the entrance to a cave featuring Native American drawings dating back to 80 B.C.?

Zeb Weese, the former executive director of the Kentucky Office of Nature Preserves and a consultant for the Kentucky Lands Trusts Coalition, said funding from the conservation fund has also significantly grown the size of Natural Bridge State Resort Park.?

“When you go to Natural Bridge, you hike around, you think that it’s forest as far as the eye can see, and it is. But a lot of that was private land that came up for sale.” Weese said. “Folks enjoy the parks in their area, but they don’t necessarily know (the) heritage land fund was part of it.”

But in the past 15 years, the funding sources for the conservation fund dwindled for a number of reasons. Revenue the fund receives from an unmined mineral tax on coal has cratered with the decline of the coal industry. Monies received from fines levied by state environmental regulators are inconsistent, and funding collected from the sale of certain vanity license plates has also declined.?

Weese said at least $15.5 million of revenue had also been swept from the fund in past state budgets, zapping it of the annual revenue that it is supposed to statutorily receive. Weese said the fund went from conserving thousands of acres each year in the early 2010s to just conserving a little over one acre of Wolfe County land in fiscal year 2023.?

Those sitting on the board overseeing the conservation fund say they’ve seen fewer applications to fund land conservation in recent years, and some past projects have had to be put on hold to wait for funding to become available.?

Weese said the budget sweeps from the fund have stopped the past couple of years, and environmental advocacy groups such as the Kentucky Conservation Committee wanted this year’s state budget to replenish the more than $15 million swept from the fund in the past by tapping into billions of dollars in the state’s rainy day fund.?

Lawmakers ultimately allocated two million dollars to the fund, which while less than what advocates wanted, could still provide more opportunities for conservation projects.?

“It’s a new lease on life,” said Hugh Archer, the vice-chair of the conservation fund’s board and past commissioner of the Kentucky Department of Natural Resources. “It’s really important that we fund these things today while they’re available and are affordable to the citizenry, and what we’re preserving is things like biological diversity.”?

Archer, who has served on the board under various governors, said it can take a while to develop and build trust with landowners, which makes having funds available important for when a land deal finally does go through. Funding can also be used to match federal grants toward conservation projects, making the fund’s dollars go even further.?

Sen. Matthew Deneen, R-Elizabethtown, who advocates point to as instrumental in getting the $2 million allocated to the fund, told the Lantern he views the money as a boon for economic development and the health of Kentuckians by creating greenspaces, parks and trails that can benefit growing Kentucky communities.?

“The heritage land trust fund is just a piece of that puzzle that has been missing, and we need to fill that void and make sure that it’s there and secure as we grow the state,” Deneen said. “When you have these amenities, it helps attract people here. What’s the closest park?”?

Deneen said he realizes $2 million is not much funding, but he believes it’s a start. He’s hopeful that local governments in particular that lack local funds can take advantage again of the conservation fund to expand and create new parks.?

“You don’t have to be some extreme environmentalist to appreciate what these amenities can bring to a community,” Deneen said.?

As for addressing how to tackle diminished revenue sources from coal mineral taxes in the future, those who work for the conservation fund say it’s an ongoing conversation that Kentucky lawmakers would need to change.?

Zach Couch, the current executive director of the Kentucky Office of Nature Preserves who sits on the conservation fund board, said those on the board plan to put the funding to “good use,” something that can be an asset for his office in protecting species that are declining but not federally listed as endangered or threatened under the Endangered Species Act.?

He said much of Kentucky’s land is still privately owned and will likely remain that way; 88% of Kentucky’s forests are privately owned, according to the Kentucky Division of Forestry. Couch said the fund provides investments toward preserving natural spaces for land owners willing to sell.?

“The best way to prevent the need for listing those species is to manage them now, and a big part of that is through land acquisition, protecting their habitat, protecting the actual population,” Couch said. “By doing this work, it’s a small investment that pays off dividends that allows for continued development and economic development of the state.”

The entrance to Mammoth Cave at Mammoth Cave National Park. (NPS Photo by Dale Pate/Public Domain Mark 1.0)

Entrance sign to the Kentucky Horse Park in Lexington. (Photo by Getty Images)

A state legislative panel unanimously approved a bill Thursday that would allow the Kentucky Horse Park to exclude its new hires from the state merit system designed to protect employees from political influence and enable the park to share in the “bedroom tax” collected by hotels, motels and other providers of overnight lodging in Fayette and Scott counties.

With no debate, the House Tourism and Outdoor Recreation Committee approved House Bill 39 on a 14-0 vote and sent it to the full House for its consideration.? The House may vote on it Tuesday.

The sponsor of the bill, Rep. Phil Pratt, R-Georgetown, told the panel its purpose is to make the 1,200-acre park in northern Fayette County off KY 1973 (Iron Works Pike) and Interstate 75 more competitive with other horse arenas in the country.

Alston Kerr, chair of the Kentucky Horse Park Commission, said the attempt is to make the park “100 percent more efficient.”

Lee Carter, the park’s director, said he was “very pleased” with the committee’s action on HB 39.

He noted that the committee voted on a substitute of the original bill.

Changes in the substitute, he said, included membership on the park commission.

Membership of the Kentucky Horse Park commission would increase under the proposed legislation. The commission now has 13 members appointed by the governor along with the secretaries of the tourism and economic development cabinets.

Under the legislation, the number of appointments by the governor would drop to 12 and the finance secretary would replace the economic development secretary.

Also added to the commission would be the state agriculture commissioner and the dean of the University of Kentucky College of Agriculture. The committee substitute replaced the tourism directors from Lexington and Georgetown with the mayors and county judge-executives.

The bill also would require the park to report to the House panel every year by Nov. 1 and remove language dealing with revenue bonds and the state code to procure various equipment.

The most controversial provision in the bill — excluding new hires from the merit system — would not affect the 55 to 60 merit employees at the park.? They would stay in the merit system but new hires would not.

Dave Smith, head of the Kentucky Association of State Employees, said after the committee meeting that without the merit system new hires at the park could be fired any time for any reason.

“We will keep on fighting this. It’s not a done deal yet,” said Smith.

The merit system emphasizes making personnel decisions (hiring, promoting, assigning work and other matters) based on an individual’s qualifications and performance. It also protects state employees against arbitrary actions and discriminatory practices. Politics is not to be involved.

Political appointees, like cabinet secretaries and other managers, are non-merit.? They generally serve at the pleasure of the governor.

Carter, the Horse Park’s director, said excluding new employees from the merit system would provide “more flexibility” in staffing.

The bill also would enable the Horse Park to share in proceeds from the transient or “bedroom” tax collected in Fayette and Scott counties.

Fayette County has a 9.5% transient or bedroom tax. Of that, 1% goes to the state for tourism efforts, 4% goes to VisitLex and the rest to retire debt.

For every percentage point, the tax generates about $2 million.? That means VisitLex gets about $8 million a year from the tax to promote tourism efforts.

Kentucky's small farm wineries would be allowed to self-distribute 12,000 gallons annually under a bill that awaits only a House vote. (Photo by Marie LaFauci/Getty Images)

FRANKFORT — After the Kentucky Senate last week approved allowing Kentucky small farm wineries to self-distribute their products, a House of Representatives committee followed suit Wednesday.?

The bill underwent some changes since it was filed after the wineries and the Wine and Spirits Wholesalers of Kentucky reached a compromise on the amount of wine the farms could sell.?

The biggest change was made by a floor amendment from the sponsor, Sen. Mike Wilson, R-Bowling Green, which lowered the amount of wine that licensed small farm wineries would be allowed to self-distribute annually from 30,000 gallons to 12,000 gallons. The wholesalers objected to the larger amount during the Senate committee meeting?and?some senators also expressed concerns over the figure.

On Wednesday, the House Licensing, Occupations, & Administrative Regulations unanimously forwarded Senate Bill 28 to the House for further review.

Brian Young, treasurer of the wineries association, said while the groups started out on different sides of the equation, negotiations are at a good point.?

“It is a game changer for Kentucky and Kentucky farms and Kentucky small farm wineries without a doubt. It changes the landscape,” Young said.?

He added that he knew of some small farm wineries that Kentucky has lost because they did not have the opportunity to get their products on shelves.?

In a tweet following the vote in the Senate last week, Charles George, executive director of the wholesalers group, said: “Working with KY small farm wineries, we agreed on a compromise to allow self-distribution of limited quantities while largely retaining our safe, reliable three-tier system. We will continue to work with our producer and retailer tiers to promote sound alcohol policy. #Cheers”

The Senate vote was 32-1. Wilson,?the Senate majority whip, said he wanted to file the legislation after learning about small farm wineries during an event in his district and that he was concerned “they did not have any distribution.”?

On Wednesday, Wilson said the bill is “a great economic incentive and tool” to grow the commonwealth. Small farm wineries are small businesses, he emphasized.?

“We had to give them the opportunity to thrive as a small business,” Wilson told the Kentucky Lantern.?

According to the Department of Agriculture’s website, Kentucky has more than 60 small farm wineries. The Department of Alcoholic Beverage Control’s online database says more than 90 small farm wineries licenses have been issued.

Kentucky's small farm wineries would be allowed to self-distribute 12,000 gallons annually under a bill that awaits only a House vote. (Photo by Marie LaFauci/Getty Images)

FRANKFORT — Kentucky’s small farm wineries are asking lawmakers to let them sell up to 30,000 gallons of wine annually to licensed retailers, but the Wine and Spirits Wholesalers of Kentucky says that’s too much.

Charles George, executive director of the wholesalers group, told a legislative committee that the wholesalers would support direct sales to retailers by small farm wineries of 7,000 gallons a year.?

“That’s more than double or even triple what most wineries in Kentucky are producing,” George told the Senate Licensing & Occupations Committee Tuesday.

The committee moved Senate Bill 28, which would set the limit at 30,000 gallons a year. Several senators voting “yes” expressed reservations about allowing small farms to sell that much wine but said they wanted to get the bill to the Senate floor.

Two representatives of the Kentucky Wineries Association made the case for what the group’s vice president Derrick Huff called “frustrated small farm wineries across our state.”

Huff told lawmakers that wholesalers do not move products from small farm wineries because it is not profitable for them and that Kentucky wine “has been cast aside and ignored by distributors” for decades.

“Imagine how much more revenue we could generate if we had a larger presence in the retail market,” Huff said. “We could grow it here, produce it here and sell it to all who come to enjoy beverages within our commonwealth.”?

Huff’s Traveler’s Cellar Winery, based in Rockfield in Warren County, has been in business three years. While the amount of product varies among small farm wineries, Huff said his typically produces 15,000 bottles. One gallon of wine is about five bottles.

Kentucky law defines small farm wineries as those producing 250 gallons to 500,000 gallons of wine in a calendar year. The 30,000 gallon figure represents 6% of what small farm wineries are allowed to produce.

The wineries would like to build large enough portfolios to attract distributors and not be their own distributor, Huff told the committee.?

Sen. Mike Wilson, R-Bowling Green, said he decided to sponsor the bill after meeting Huff and learning about small farm wineries during an event at one in his district. Wilson, the Senate majority whip, said he “found out that they did not have any distribution, and so that was very concerning to me.”

Both the winery owners and the wholesalers were scolded by Senate Majority Leader Damon Thayer who said he was weary of resolving disputes like this.?

“You know when you come before this committee and spend an hour of our lives that we’re never going to get back, you guys come up, you attack the distributors. You come up, you got to play defense, kind of attack the wineries. I’m tired of it.”?

According to the Department of Agriculture’s website, Kentucky has more than 60 small farm wineries. Small farm wineries’ licenses can be found in the Department of Alcoholic Beverage Control’s online database. Of the 92 licenses issued, four had out-of-state premise addresses listed.

Entrance sign to the Kentucky Horse Park in Lexington. (Photo by Getty Images)

The Kentucky Horse Park wants state lawmakers to approve legislation that would exclude its new hires from the state merit system designed to protect employees from political influence.

It also is seeking enabling legislation to allow the park to tap into the transient or “bedroom” tax collected by hotels, motels and other providers of overnight lodging in Fayette and Scott counties.

The moves are several being mulled in hopes of making the 1,200-acre park in northern Fayette County off KY 1973 (Iron Works Pike) and Interstate 75 more self-sustaining and competitive with other horse arenas in the country, said the park’s executive director Lee Carter.

Other moves the park is seeking include increasing the number of members on the park commission and streamlining purchase procedures for the working horse farm and educational theme park that opened in 1978.

State Rep. Phil Pratt, R-Georgetown, said he will file the legislation on the first day of the Kentucky General Assembly on Jan. 3.

Senate Majority Leader Damon Thayer, R-Georgetown, who called the legislation “a work in progress,” said he thinks it will be dealt with in the early part of next year’s 30-day session, which is to end March 30.

Thayer said he is for any legislation that can make the park more competitive and financially viable.

Merit System change

The most controversial part of the Horse Park legislation is expected to be the merit system, said Pratt.

Carter said the legislation would not affect the 55 to 60 merit employees currently at the park.

“They would stay in the merit system but new hires would not,” he said.

Most state workers in the executive branch of state government are merit employees under Kentucky Revised Statute 18A. They often are referred to as “18A employees.”

The merit system emphasizes making personnel decisions (hiring, promoting, assigning work and other matters) based on an individual’s qualifications and performance.? It also protects state employees against arbitrary actions and discriminatory practices. Politics is not to be involved.

Political appointees, like cabinet secretaries and other managers, are non-merit.? They generally serve at the pleasure of the governor.

According to the state Personnel Cabinet, there are 28,719 full-time executive branch employees.? Of them, 22,359 are “18A” merit employees.?

A total of 1,881 state employees are classified as “non-chapter.” They are state employees not in political positions but are not under the merit system. Most of them work for the Kentucky State Fair board and various boards and commissions.

Non-chapter state employees receive state benefits like health insurance but have no right to appeal any personnel action to the state Personnel Board.

Carter said excluding new employees from the merit system would give the Horse Park “more flexibility” in staffing.

“The merit system is a wonderful system but it can be a slow process of bringing in people and hiring,” he said. “Last year we lost 10 employees and needed to replace most of them quickly. We have 30 miles of fences and much mowing and trimming to keep up with.

“Being non-merit will allow us to act more quickly in staffing,” he said. “We believe we have a lot of similarities with the Fair Board and would like to operate similarly.”

David Smith, executive director of the Kentucky Association of State Employees, opposes the idea of not placing new Horse Park hires in the merit system.

“I think it’s a bunch of nonsense,” he said. “They would not be afforded the rights under the merit system and likely would be more subject to political patronage.”

?Smith said the practice of making more state workers “non-chapter” has been increasing.

“It already is hard enough to find people to work for the state,” he said.? “This practice will only make it that much harder.? It should be stopped. It’s just another way of removing the rights of employees.”

?Bedroom tax?

Many of the more than 600,000 people who visit the Horse Park each year as tourists or competitors stay in hotels, motels and other overnight lodging in Fayette and Scott counties, said Carter.

“We are busy 50 weeks out of the year. The bedroom tax would be a revenue stream for us of about $1 million annually,” he said.

“The extra money could help the park lower its fees to visit or compete at the park, help improve 40 years of deferred maintenance and maybe ask the General Assembly for less of a state appropriation.

“I would love to have a bedroom tax earmarked for the Horse Park.”

The legislature could not dictate on its own that Fayette’s and Scott’s bedroom tax receipts go to the Hhorse Park, said Carter.?

“Those taxes are set by the local tourism bureaus. They would have to determine if any money goes to the horse park. Those local tourism agencies would have to approve it and then it would go to their councils.”

Mary Quinn Ramer, president of VisitLex and a member of the Horse Park commission, stressed that what the Horse Park is seeking now is only enabling legislation from the state.

“Many decisions would have to be made before this would become a reality,” she said.

Fayette County has a 9.5% transient or bedroom tax. Of that, 1% goes to the state for tourism efforts, 4% goes to VisitLex and the rest to retire debt.

For every percentage point, the tax generates about $2 million, said Ramer.? That means VisitLex gets about $8 million a year from the tax to promote tourism efforts.

“We would have to get input from the hotels and motels before supporting the Horse Park,” Ramer said.

Carter noted that the bedroom tax in Lexington is supporting the Central Bank Center, a multi-purpose event and convention facility in downtown Lexington that includes Rupp Arena.

“We just think the Horse Park should get some help, too,” he said.

Asked if the goal is to make the Horse Park a private enterprise, Carter said, “That idea has been around for years. I don’t know if that makes sense.? I’m much more inclined to make ourselves more efficient.”

Other possible changes

Membership of the Kentucky Horse Park commission would increase under the proposed legislation.

The commission now has 13 members appointed by the governor along with the secretaries of the tourism and economic development cabinets.

Under the legislation now being considered, the number of appointments by the governor would drop to 12 and the finance secretary would replace the economic development secretary.?

Also added to the commission would be the state agriculture commissioner, the dean of the University of Kentucky College of Agriculture and the tourism directors from Lexington and Georgetown.

“These changes in the commission could provide better long-term strategic plans,’ said Carter.

Another change being sought by the Horse Park deals with state regulations on purchasing and getting rid of old equipment.

Under the legislation, the park would remain under the state Tourism Cabinet.??

Considered earlier for the legislation was a provision to give the Hhorse Ppark eminent domain authority to take nearby private property for its use, following the payment of just compensation.?

“We modeled the language in our legislation after that of the state Fair Board,” said Carter.? “Eminent domain was initially in but we soon deleted it. We have no eminent domain issues here at the park. We are surrounded by folks of whom we would have no desire to move into their space.”

Reason for the changes

Up until late 2010, the Kentucky Horse Park was the biggest, most well-known venue and horse leader for equine events in the United States, said Carter.

Since then, five or six major horse facilities have come on line that are privately funded,” he said. “They are potential competition. All those facilities will want to host the? events we have.”

The Horse Park’s annual operating budget is $13.9 million. About $2.2 million of that comes from the state’s General Fund, which pays for most state programs. The rest is generated by the park.

“Our goal is to be able to manage ourselves and to compete against the private industry. It is how we maintain what we treasure,” said Carter, who came on board in January as the park’s executive director.

Carter, of Georgetown, had been executive director of Equestrian Events, Inc., the organizing body for the Land Rover Kentucky Three-Day Event, since 2012, that attracts more than 80,000 guests to the park.??

He said the park’s commission is “fully aware” of the legislation.

At a Nov. 17 meeting of the House Economic Development and Workforce Investment Commission, Alston Kerr, the horse park’s commission chair, appeared with Rep. Pratt and Carter to discuss the legislation.

She said, “State requirements make it very hard to operate a facility as diverse as we are and to be competitive in the private market.?

“We need a level playing field to be competitive.”