While millions visit the Ark, Grant County is sinking fast, trying to avoid bankruptcy, offering no amenities

From Governing.com:

By Alan Greenblatt
Staff Writer

It’s possible that Grant County has touched bottom. The county, which lies midway between Cincinnati and Lexington, almost ran out of money this spring, which would have prompted a state takeover.

In March, county officials approved a 2 percent payroll tax on local workers. This will bring in more than $3 million in the coming year, enough to avoid bankruptcy. But things will still be a bit dicey. Collection of the new tax won’t start until the beginning of the fiscal year, July 1 — the same day the county faces a $500,000 payment on the debt it owes for jail operations.

“We think we can make it to the end of the fiscal year,” says County Judge Executive Steve Wood, “but we may have to take out a loan.”

For a while, the county thought Noah’s Ark would save them. Desperate for a new revenue source, local officials gave hefty land grants and tax incentives to the Ark Encounter, a religious theme park that includes a “life-sized reconstruction” of Noah’s ship, along with a creation museum. The park opened last July, but due to the tax breaks, it hasn’t translated into any sort of public revenue windfall for the county.

Visitors to the Ark complex also haven’t been spending as much money as had been initially hoped. In part, that’s because there are few other attractions nearby to entice them to stay. There also aren’t enough hotel rooms to accommodate tourists or restaurants to draw them into local business districts.

“We haven’t had anything really built yet,” Wood says. “That was probably wrong on our part.”

With perhaps a million Ark visitors now expected annually, things might be starting to change. The city of Dry Ridge has just announced that two new hotels will be built over the coming year, along with some new restaurants. If tourists can be convinced to visit Grant County downtowns when they come to see the boat, that should bring in a few more dollars to help the county balance its books.

Grant County

The truth is that Grant County’s problems are largely its own fault.

For two decades, county officials refused to raise taxes. Instead, to make up for funding shortfalls, they dipped into reserves, draining them by some $2 million over the past eight years. “Over time, of course, if you don’t replace those reserves, you’re going to have a situation where you have a deficit,” says Jamie Baker, executive director of the county chamber of commerce.

It was the jail that generated the most serious financial trouble. Deferred maintenance led to serious deterioration, with the state eventually deciding to pull its prisoners out of the county lockup altogether.

That led to a substantial drop in revenue, prompting local arguments about whether it made more financial sense to close the jail or clean things up sufficiently to recapture housing fees from the state. Along the way, Wood and the county jailer, who had been sparring, ended up suing each other.

Whatever relief the Ark may bring, the county’s budget problems are going to remain a sore point for years to come.

“We’re going to grow,” says Baker, the chamber official. “It’s just going to take some time.”

Alan Greenblatt covers politics as well as policy issues for Governing. He is the coauthor of a standard textbook on state and local governments. He previously worked as a reporter for NPR and CQ and has written about politics and culture for many other outlets, print and online. Reach Alan Greenblatt at agreenblatt@governing.com