A 3 percent tax on lodging currently brings in about $650,000 a year and is pumped back into tourism promotion. Haywood County commissioners will ask the state legislature for permission to raise the tax to 6 percent. They want to use the extra money from the tourism tax increase in severalways:
• 1 percent to divvy up among districts of the county for special uses, such as festival promotion. This will be enacted right away. The bulk of the lodging tax is used to promote the county as a whole, while this would provide money for each community. It would be divvied up according to where it was collected. The county would be split into five districts — one for each zip code — for purposes of dividing up the money. A committee comprised of tourism and business leaders from each district will make recommendations to the tourism authority on how the money should be used in their district. The tourism development authority would have final say over how each district uses the money.
• 1 percent to fund recreation capital projects, such as soccer fields, parks, walking trails, a skate park and outdoor pool. This may or may not be enacted right away.
• 1 percent for the future. This will not be enacted right away, or any time in the near future. The maximum lodging tax allowed in the state is 6 percent. The county must get state approval to hike the tax from its current level of 3 percent. Commissioners figured since they are going to Raleigh now, they may as well ask for the whole 6 percent, even if it isn’t all enacted right now, so they don’t have to go back again in the future if they decide they want it.
Tourism dollars for recreation
Some of the plan for the extra 3 percent was developed by a task force appointed by commissioners to examine the tourism authority. The measure to use 1 percent toward recreation projects was developed solely by the commissioners, however.
Other counties have recently begun putting a portion of their tourism tax revenue toward projects that enhance the county rather than limiting the tax solely to tourism promotion in the strict sense of the word. Enhancements some counties have perused include sidewalks, boat docks, trails, fountains, and soccer complexes. These enhancements make a county a more attractive destination and is a legitimate use of tourism funds, according to the rationale behind it.
In Haywood County, a master recreation plan developed jointly by the county and all four towns has been in the works for a year. The master plan has just been released and calls for a host of new recreation amenities, from a major soccer and ball field complex in Jonathan Creek to a skate park in Waynesville to a four-mile greenway along the Pigeon River Valley between Canton and Clyde.
It is unclear how well the commissioners can mandate that a portion of the lodging tax increase go toward recreation development. A nine-member Tourism Development Authority oversees how the lodging tax is spent. The commissioners appoint the members to the tourism authority, but the authority is autonomous in its decisions on how to spend the lodging tax money. The county commissioners do not have the final say over the tourism authority budget.
Commissioners want to spell out in the legislation approved by the state that 1 percent of the lodging tax must be spent on recreation capital expenditures. But County Attorney Chip Killian recommended keeping the language very simply in the legislation: two-thirds of the lodging tax should be used to promote travel and tourism and the remaining third should be used for tourism-related activities including recreation. Killian said otherwise it would be hard to pass.
“I think it would be too radical a departure from the protocol of most tourism development authority legislation,” said Killian, who also works as a lobbyist in Raleigh. “I’ll try, but it could be hard to get a dedicated revenue stream for recreation in there. Sometimes that level of detail is hard to achieve.”
Commissioners were leery of that and said they would prefer the legislation to be as specific as possible. Otherwise, the tourism board could spend the money on recreation — or not. The commissioners might not have a recourse to force the tourism authority to spend the money on recreation.
Killian said the county commissioners could pass something locally that requires the tourism authority to spend the money on recreation. After the state approves the legislation, the commissioners have to enact it locally, and at that time they can insert wording to require recreation funding. Killian said such wording at the local level would fall short of a mandate for the tourism authority, but would be “more than a strong recommendation.”
Besides, the county would have a trump card, Commissioner Kirk Kirkpatrick pointed out. The county could disband the entire tourism authority if it didn’t follow the commissioners’ wishes to spend 1 percent of the lodging tax revenue on recreation projects. Commissioners also said they would only appoint members to the tourism authority that supported the recreation spending measure.
Dollars for districts
Some are not happy with the system that will be used to divvy up money between various districts of the county. Town leaders and business leaders from Maggie Valley wanted autonomy over their portion of the tax increase.
On one hand, they are pleased that a portion of the tax increase will be reserved for special uses within different areas of the county. Historically, the tourism authority doled out a portion of the room tax dollars to Maggie Valley. The money was given directly to the Maggie Valley Chamber of Commerce, which in turn decided how to spend it.
Complaints arose from other organizations in Maggie Valley, however, that the chamber was not sharing the tourism tax dollars but instead using them exclusively by the chamber.
Similar complaints cropped up in other areas of the county, which also received special pots of money from the tourism authority. Canton’s share was given to Canton Papertown Association, leaving none for other organizations that wanted to put on festivals, for example.
So two years ago, the tourism authority changed the way it doled out the money for the various districts. Groups would appeal directly to the tourism authority, which in turn made the decisions themselves. That worked for a couple years until this year, when the tourism authority decided not to hand out as much money and spend more on overall marketing efforts. That angered the towns and the chambers of commerce that relied on the money each year to promote festivals and operate their visitor centers.
Public outcry over those budget cuts was the main reason commissioners appointed a task force to examine the tourism authority. Restoring the special pool of money reserved for each community is better than nothing, but Maggie leaders wanted autonomy over that money. Instead, a committee will simply make recommendations to the tourism authority on how Maggie’s portion of the money should be used, but the tourism authority gets final say.