Posted: Sunday, September 27, 2015 12:00 am
The Cumberland County Board of Commissioners may not have understood the risk they took when they asked their lawmakers in June to give them control of about $5.6million in hotel taxes paid here.
For nearly 15 years, Cumberland County has had a sweet, unorthodox deal among the laws governing North Carolina hotel taxes. Half of Cumberland County hotel tax revenue is spent on things that do little to benefit the local hotel industry: The local arts council and the Crown Complex coliseum. Each gets nearly $1.4 million of the net proceeds.
The commissioners’ request, pending in a legislative conference committee – could put that deal in jeopardy.
The commissioners want to take control of the money away from the county Tourism Development Authority, a seven-person board appointed by the commissioners, and whose membership by law is dominated by the local hotel owners.
Board Chairman Kenneth Edge expressed concern with how the Tourism Authority is handling its money, but he wouldn’t discuss specifics. The authority gives the Fayetteville Area Convention and Visitors Bureau about $2.5 million of the hotel tax revenue to promote our area to travelers and tourists.
The visitors bureau has done some strange things in recent years, such as last year’s removal of “Fayetteville” from its name. (That decision was reversed a few months later.)
The commissioners’ plan would slash the visitors bureau funding to about $1.1 million and put more money, nearly half the total hotel tax revenue, into capital projects.
This likely would continue sending money to the Crown Coliseum – it has a debt to service.
Would the commissioners also spend some on a new arts center? One has been discussed for downtown.
Would the proposed Civil War museum on Haymount Hill would get an allocation? What about a new minor league baseball stadium?
Which of these projects would draw a noticeable number of overnight visitors to stay in local hotels?
That’s what has the hotel industry upset. It says hotel taxes should be spent on programs that put heads in hotel beds.
“This ill-considered move would allow the commissioners to divert occupancy tax proceeds away from their intended purpose and toward whatever projects the commissioners wish to fund, whether they promote tourism or not,” Lynn D. Minges of the N.C. Restaurant Lodging Association said in a letter to state lawmakers.
She said the legislature should make no changes to how the hotel tax money is handled in Cumberland County. That’s lucky for the county commissioners.
Consider what happened in Lumberton.
In 1997, that city obtained a increase in its hotel tax to plug a shortfall in its general operating budget. But at the behest of the hotel industry, the increase was temporary. It expired after three years.
And at the industry’s request, the law authorizing the temporary tax increase added a new restriction. It crimped the flow of money to Lumberton’s downtown Carolina Civic Center. The Civic Center’s allocation had been steadily growing over the years as tax collections rose. The allocation was abruptly capped at $115,000 per year by the new law.
Lumberton was fortunate that the legislature allowed the Civic Center to continue to get any of the money. It’s a lovely theater, but its events are aimed at local and regional audiences, people unlikely to stay overnight.
The hotel groups question whether many spectators at the Crown Complex’s events stay overnight.
Likewise, the Arts Council of Fayetteville/Cumberland County underwrites many good things. But how much of its work draws a significant number of overnight visitors to Fayetteville?
If the Cumberland County Commissioners have problems with the operations of the Tourism Development Authority and the Fayetteville Convention and Visitors Bureau, they don’t need to change the hotel tax law to fix them.
They should consider their moves carefully when any law change is subject to the desires of outside forces that have influence in the General Assembly.
Staff writer Paul Woolverton can be reached at woolvertonp@fayobserver.com, in Raleigh at 919-828-7641 or in Fayetteville at 910-486-3512.
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Sunday, September 27, 2015 12:00 am.
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