State proposes doubling to quadrupling ad rates for highway signs promoting businesses

Let’s say you hadn’t raise your advertising rates in a few years. In the middle of a pandemic, if you realized it has been a while since rates changed, would you catch up the prices all at once? How about if it involved subscriptions and knowing your rates hadn’t risen constantly to offset newsprint and postal increases, would you quadruple the subscriptions rates all at once?

That in essence is what the State Transportation Cabinet is doing to Kentucky businesses who have small “logo” signs near exits. You know, the blue signs that show what restaurants or gas stations, hotels or tourist attractions are located at the next exit.

Apparently those businesses got a surprise recently with the notice of an Administrative Regulation being proposed that would increase the yearly costs for “advertising” on the signs.

The state is proposing rate increases of 200 to 400 percent.

For gas, food and lodging facilities, the cost will increase from $600 per year to $1,200 per year. But that’s almost negligible to tourism and attraction locations that face an increase from $300 per year to $1,200 per year. And remember that’s per direction so a business would be paying the amount twice if there is an exit from both directions. Every business has at least two signs at each exit — one about a mile from the exit and the other on the ramp showing which way to turn and then how far the business is from the exit ramp. And remember it’s per direction so a business could have a total of four signs at each exit area.

Both types will also face a tripling (from $100 now to $300 if the regulation is approved) on the installation cost of each sign.

I seem to recall the highway signs were the idea of Gov. John Y. Brown Jr. and now I see why so many states have adopted the practice. That’s a pretty good money-maker with little work at all except when a business’ sign has to be added or taken off the bigger highway sign.

Next time you drive down an interstate, even for just a few miles, count the individual businesses represented on each large blue sign and multiply that by $1,200. Sounds like the state has a windfall what with all the signs located along the roads across the Commonwealth.

I did that driving home to Georgetown Thursday. At the Frankfort/Versailles exit on I-64 East, I counted a total of 26 ad signs. For a year, that’s $31,200 for ONE direction — eastbound — and amounts to $62,400 a year for both directions. At Exit 125 in Georgetown, there were 29 total signs or potentially $34,800 a year for that one exit.

The state’s reason for the increase is spelled out in part of the regulation:

“The necessity for the establishment or increase in the fees is due to the fact that the fees have not been adjusted since this administrative regulation became effective. In more than a decade of effectiveness, this administrative regulation has fallen behind in maintaining competitive fees, as exhibited in the attached fees chart demonstrating the fees collected by sister states. Moreover, with the increase in the expenses stemming from property damage and maintenance, the additional fees will assist in reasonable and adequate recovery.”

The Kentucky Travel Industry Association (KTIA) put out a plea to its members to read the regulations proposed and send comments to be used at the public hearing. Here’s a link to the proposed regulations and the reasons for the fee increase:

And you can be certain organizations representing tourism, attractions, hotels, restaurants and gas stations will be out in force November 22 when there’s a public hearing on the regulation, with written comments being accepted until midnight on November 30.

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