Faced with seeking more revenue sources in tight budget times, Mount Airy officials are eyeing local tourism taxes as one possibility.
Those funds, which come from a 6 percent occupancy tax on rentals at local lodging establishments, represent a growing pot of money some city officials believe there should be greater municipal control over, based on discussion at a planning retreat last week.
As it now stands, all that money — including $360,000 budgeted for this fiscal year — is collected by the city government but paid quarterly to a group known as the Mount Airy Tourism Development Authority (TDA). The TDA governing board then spends at least two-thirds of the funds on advertising and marketing of the area, with about one-third available for infrastructure projects such as a recent effort to convert the Earle Theatre to a digital facility.
The TDA uses all the money as it sees fit, but in accordance with state legislation enacted years ago specifically permitting the collection of the occupancy tax here.
Shirley Brinkley, a member of the Mount Airy Board of Commissioners — and also the TDA board — believes the city government itself should start getting some of the occupancy tax revenues.
She mentioned other towns where occupancy taxes are levied, which collect all the proceeds then delegate money for tourism-related expenditures.
“We give 100 percent, which not a lot of cities do,” the commissioner said of delegating the money to another entity.
A different arrangement should be considered in Mount Airy, according to Brinkley, whose sentiments were echoed by Commissioner Jon Cawley.
“I think it made sense when it was $100,000 (per year), but it has grown,” Cawley said of the present system that now involves significantly more money.
Although the city budget reflects occupancy tax revenues of $360,000 for the 2014-2015 fiscal year, the final figure probably will be higher, city Finance Director Pam Stone said. She said it could total $400,000 — “which is a good indicator that people are traveling.” For the first five months of the fiscal year, through November, the revenues were up 10 percent over the same period in 2013.
Cawley said he believes local citizens should be benefiting more from those funds.
State Action
Changing Mount Airy’s procedure of occupancy tax collection and dispensing would require special action by the N.C. General Assembly, according to City Attorney Hugh Campbell.
That’s because occupancy tax legislation is specific to each locality, he explained, including how the money is to be distributed and who can remit those funds and how.
There was support at the retreat for seeking the required legislative change in Raleigh and Brinkley reiterated that Wednesday. “Absolutely,” she said.
Brinkley emphasized during the retreat discussion that her desire to change the occupancy tax set-up does not signal any dissatisfaction with those who now administer the proceeds.
“This is not ‘cause you’re mad at anybody, or trying to create a mess,” she said. It is simply a matter of the city needing to tap into additional revenue sources to meet several pressing needs, Brinkley said.
Also discussed at the retreat was the possibility of an event fee that would be charged when organizations hold fund-raising walks or similar activities that require police and other services. Such a fee was first discussed a couple of years ago, but never materialized.
Along with balancing the regular city budget, Mount Airy officials have been asked to fund a new fire truck, add parking at Reeves Community Center, develop a shell building to better attract industry and other projects in the next fiscal year.
One target of TDA funding could be the redevelopment of the former Spencer’s industrial site in downtown Mount Airy, Brinkley said. This might include funding a conference center that local tourism representatives have said would boost visitation here.
Brinkley indicated that her position on the occupancy tax is bound to ruffle feathers — even with the group of which she is a member.
“I’m on the TDA board now,” she said.
“But I may get kicked off after this.”
Tom Joyce may be reached at 336-415-4693 or on Twitter @Me_Reporter.
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