Task Force to Review Uses of Rapidly Growing Hotel Occupancy Tax, report by Marie Albiges, Community Impact, September 21, 2016
CTXLT note: The hotel occupancy tax goes principally to the Austin Convention Center and to the Austin Convention and Visitor's Bureau, but about 10 percent is channeled to arts organizations through the City of Austin's cultural funding program. The tax has grown steadily from $50.5 million in 2012 (with $5.9 million for the arts) to an estimated $89 million in 2016 (with $9.2 million for the arts). The City is expected to appoint a task force to elaborate alternate scenarios for these monies and to report by April, 2017.
It appears that the convention center is aiming to get money for a building expansion and there's likelihood that downtown west of I-35 wants to be funded as a Tourism Improvement Project. There appears to be no comment as yet on funding for the arts, artists or arts venues. Membership of the task force is not revealed.
Hotel Tax to be reviewed
Group to assess tourism revenue use
by Marie Albiges
Community Impact, September 21, 2016
Rapid revenue growth brought on by Austin’s hotel guests has City Council asking whether the funds can be used to pay for a broader range of tourism-related services.
By the end of 2016, Austin is projected to have 35,100 hotel rooms—a 34 percent increase from 2006—which are all subject to a hotel occupancy tax rate of 15 percent, according to the Austin Convention and Visitor’s Bureau, the city’s marketing entity.
That money funds the ACVB, the Austin Convention Center and the city’s cultural arts program.
Given the rise of hotel tax revenue throughout the years—from $36.6 million in fiscal year 2005-06 to more than $90 million estimated in FY 2016-17—District 8 Council Member Ellen Troxclair wants to look at how that money can be distributed to other community programs, venues and events that draw tourists to Austin.
“Basically, we can use [hotel] taxes to their highest and best use while lowering the property taxes,” Troxclair said. “That is my ultimate goal.”
Meanwhile, discussions continue on a possible Austin Convention Center expansion, which would cost an estimated $400 million-$600 million in citizen-approved bond money, and tourism industry professionals said additional hotel tax revenue is needed to meet increasing demand from visiting organizations.
Task force to study revenue use
Austin City Council unanimously voted Aug. 18 to approve a Troxclair resolution that creates a community task force to examine whether city-funded tourism entities, such as Barton Springs, Zilker Botanical Gardens, the Carver Museum and the Emma S. Barrientos Mexican American Cultural Center, could instead be funded by hotel tax revenue.
The 13-member task force—consisting of community members and industry professionals—will study how the tourism dollars can be used according to state law, the impact of tourism on those entities and whether operational costs of could be offset by hotel tax revenue.
After the task force is nominated by City Council on Oct. 9, it will have until April 1 to create recommendations on how to best use all hotel tax revenue.
If the task force recommended—and City Council agreed—to use hotel tax revenue to fund other facilities that draw tourists to Austin, the ACVB, the Austin Convention Center and the cultural arts program’s budgets might be affected.