The equine region of the Bluegrass offers more than cultural and visual quality.  The equine industry itself represents a significant part of the regional economy.  Over two dozen national equine organizations are headquartered in the Lexington area, while the industry is served by numerous local businesses, from ferriers to veterinarians and financial institutions to restaurants and hotels.  A study by the Center for Business and Economic Research (CBER) at the University of Kentucky determined that $30 billion of wage and salary earnings of households in Kentucky can be attributed to the direct and indirect effects of the equine industry.  In Kentucky, equine sales alone totaled $650 million in 1998, ranking Kentucky first among states in value of equine sales (NASS, 1999).  Adding the equine sales figure to gross dollar contribution of horse racing, showing, and recreation in the state, the indirect and direct effects of the equine industry total over five billion dollars annually  (KPMG, Vol. II, p.19).

Known as the horse capitol of the world, the Bluegrass Region attracts over a million tourists per year, generating approximately $951 million annually in tourism revenue (KY Dept of Travel Development, p.1). Additionally, 14,600 tourism related jobs can be attributed to the equine industry.  Many horse farms allow tours and enhance the rural landscape by maintaining public rights-of-way along their farms at no cost to the taxpayer.

Although it is difficult to place a dollar amount on the quality of life enjoyed by residents of the state as a result of the equine industry and rural character of the Bluegrass Region, the CBER study attempted to put a dollar value on the annual "amenity value" of the equine industry as part of the quality of life in the state.  The 1991 CBER survey concluded that, "The average value of avoiding a complete loss of the equine industry  (to the average Kentucky household) was estimated at $252.  The total value of the existence of the Kentucky equine industry was estimated at $357.7 million per annum." (CBER, p.177).

A more recent telephone survey of Fayette county residents in 1996 by the University of Kentucky Survey Research Center found that, "A majority (52.45%) of those polled said they would support a tax increase that was specifically earmarked for the preservation of public and private open spaces and parks.  Of those, two-thirds (were) willing to pay $50 or more a year (and almost half of those respondents were willing to pay $100 or more).  This support is almost evenly distributed among every age, income level, and geographical area of the community. " (LFUCG Greenspace Commission Summary, p.2).

Non-equine related agriculture also has a tremendous positive impact on the regional economy.  According to the 1997 USDA  Agriculture Census, the six counties (Bourbon, Clark, Fayette, Jessamine, Scott, and Woodford) located within the Equine Resource Area (ERA) in the Bluegrass Region produced $42 million more in agricultural income than the next six highest producing counties in the state.  Additionally, the agricultural income of the six ERA counties was generated more efficiently, utilizing only 60% of the area’s land as compared to the next six highest producing counties.  This comparison does not include the $570 million in equine sales that same year (NASS).  Clearly, general agriculture in the ERA region is an efficient, profitable part of the Bluegrass economy.

Although it is clear that agriculture, in general, and the equine industry, in particular, are responsible for a significant portion of the economic and aesthetic advancement of the Bluegrass Region and Kentucky, there is another less desirable economic reality to consider.  Farmers may find it more profitable to convert their agricultural land to a nonagricultural use than to continue farming it.

If farmers in the region were to sell their land for continued agricultural use, the price would be at most $5,000 per acre (1997 USDA Agriculture Census).  If the land is sold for equine related operations, the price increases to $15,000-$19,000 per acre depending on the degree of infrastructure development (Equine Farm Managers).  However, if that same land is within an area zoned for commercial or residential development, the price can escalate to between $20,000-$300,000 per acre (PVA Offices & Local Developers).  Given this economic reality, it becomes easy to understand the unprecedented pressure on farmers to sell their agricultural land for residential and commercial development.

In other parts of the United States, the public has voted to commit public funds to the preservation of unique agricultural lands.  Kentucky has an existing Purchase of Agriculture Conservation Easements (PACE) program that seeks to preserve agricultural land.  The Bluegrass Conservancy is also a viable option for landowners who wish to donate their development rights in exchange for lower property and inheritance taxes and the assurance their land will remain in agricultural use for perpetuity.  Fayette county currently is exploring the adoption of a Purchase of Development Rights (PDR) program.  These programs offer promise that the finite natural resource of agricultural land and the cultural integrity of the Inner Bluegrass Region can be maintained.

Besides contributing to the general economy of the region, agricultural land actually costs taxpayers less for municipal services if it is left rural rather than converting it for residential or commercial development.  The American Farmland Trust has conducted more than 40 Cost of Service studies across the nation and concluded that for every tax dollar contributed by commercial, agricultural and residential land use, the commercial land demands $.29 in municipal services, agricultural land demands $.31 in services, and residential land demands $1.11 in services (American Farmland Trust Cost of Community Services Studies).  Although initially it may appear that commercial land is the least expensive land use for services, this type of development usually goes hand in hand with residential development.  An average of the cost of services for both commercial and residential land use is $.70, over twice the cost of services for agricultural land.  In short, farmland protection may be more financially advantageous to taxpayers in the long term.