A proposed resolution before Louisville Metro Council would extend an agreement that keeps Churchill Downs from paying some taxes for another 30 years.
Unlike other businesses, Churchill Downs has not paid local property taxes in Louisville since 2002, when the deed for the storied race track was transferred to the city. The deal made the property tax-exempt, but the company agreed to continue paying Jefferson County Public Schools the portion of revenue the district would have otherwise received.
That could change soon. Some city officials now want that money, known as a payment in lieu of taxes or PILOT, to go into Louisville Metro’s coffers, not the school system’s.
Mayor Craig Greenberg said Tuesday morning that the city bears the burden of providing services to Churchill Downs. The PILOT payments would be a way for the city to recover those costs.
“I think the theory there is that Louisville Metro provides a lot of services to Churchill Downs and the neighborhood,” Greenberg said. “There are no residential units [on the property], so there won’t be any additional children going to the school system.”
Greenberg said the city had been negotiating a new agreement with Churchill Downs “for several months.” He said he didn’t know whether JCPS officials had been blindsided by the release of the proposal late Monday.
In a statement Tuesday afternoon, JCPS spokesperson Carolyn Callahan responded to the proposal.
"We were not aware of this ordinance until media reports came out. It is of concern to us and our legal team is looking into any legal ramifications," she said.
Supporters of the proposed agreement say the continued tax breaks for Churchill Downs are an important part of keeping a large employer in Louisville.
The concern is particularly potent, given the recent departure of KFC to Texas and Humana’s decision last year to downsize its downtown footprint.
District 17 Metro Council Member Markus Winkler, a Democrat and vice chair of the council’s Budget Committee, said the proposed agreement is “one of the limited tools” the city has to attract and retain big businesses.
“While somebody might say, ‘Oh, Churchill Downs is never going to leave Jefferson County. The track is where it is,’ that’s true, but most of their corporate jobs are in an office building that can easily move,” he said. “Three months ago, people would have said ‘How can Kentucky Fried Chicken leave Kentucky?’”
Winkler is sponsoring the resolution — which would divert the revenue from JCPS and to Louisville Metro — along with District 11 Republican Kevin Kramer, the Budget Committee chair.
Like Greenberg, Winkler argued that the shift in funding to Louisville Metro is fundamentally about fairness. He said all of the events held at Churchill Downs each year, including the Kentucky Oaks and Derby, rely on public infrastructure, police and emergency medical services.
“Metro Government generates zero direct tax dollars out of that,” he said. “We don’t tax the gaming, we don’t tax the hotel rooms … we don’t generate a dollar off sales tax. The only revenue we generate is the indirect revenue of people who are employed who pay payroll taxes.”
The PILOT payments from Churchill Downs to JCPS have totalled roughly $4 million over the last six years, according to documents obtained by WDRB. They make up a small portion of the school district’s general fund budget, which was $1.1 billion last year. The city, meanwhile, operated on a $815 million general fund in the 2024-25 budget year.
The payments to JCPS have increased significantly in recent years after the Jefferson County Property Value Administrator “corrected a mistake” in 2019 that undervalued the race track by tens of millions of dollars.
The PILOT payments are expected to increase even more, with Churchill Downs announcing plans to take on nearly $1 billion in renovations earlier this year. If the proposed resolution passes, that annual payment will go to Louisville Metro rather than JCPS.
Greenberg told reporters Tuesday that he doesn’t expect the school district will be impacted by the loss in funding. He said he thinks it will be “a long-term success” for JCPS and the city.
“New jobs are going to be created,” he said, alluding to jobs connected to Churchill Downs’ planned renovations. “Those individuals will be buying homes. They will help increase other property tax values that will be going up, surrounding Churchill Downs and across this entire city.”
The proposed deal between the Louisville and Churchill Downs is expected to be assigned to Metro Council’s Budget Committee. It could get a first hearing as soon as next week.
