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Fee waivers cost more than $2 million but bring in tax dollars

Wednesday, May 29, 2013 by Michael Kanin

According to documents produced in response to a budget question from Council Member Laura Morrison, the Austin City Council authorized more than $2 million in fee waivers for events from the beginning of FY2012 through May 7, 2013.


A look at the details of the answer to Morrison’s question, along with those offered to Council Member Kathie Tovo as part of the city’s FY2012 budget process, reveals that the dollar figure associated with such waivers is steadily increasing.


The largest single recipient of the waivers is, by far, the annual South by Southwest cultural festival. In FY2012, the event received $441,277 in waivers. In 2013, that figure grew to $676,861. Together, those figures account for more than half of the city’s fee waivers over the period of time that Morrison queried.


Other events that saw significant fee waivers include the Austin Farmers Market ($189,888 in FY12; $184,053 through May 7 in FY2013), the 2012 Juneteenth Run, Parade, and Celebration ($79,028 in FY12; figures for FY2013 were not yet available), and the Austin July 4 Symphony Concert ($43,533 for FY2012; FY2013 numbers not yet available).


The issue of fee waivers is a lingering one. Council members – aside from Council Member Bill Spelman, who rarely engages in the practice – submit routine requests for the negating of fees that would normally be associated with events. During the 2012 budget cycle, Tovo asked for a set of numbers similar to those requested by Morrison.


The tallied results were somewhat lower. However, they reflect a trend: For FY2009, FY2010, and most of FY2011, the city waived just over $1.3 million in events fees. South by Southwest again accounted for the largest chunk of those. The festival earned a waiver that increased from $164,364 in FY2009 to $224,708 in FY2010, to $322,492 in FY2011.


The Juneteenth festival asked for $27,648 in FY2009, $41,208 in FY2010, and $50,408 in FY2011. The July 4 Austin Symphony concert neglected to ask for waivers for FY2009 and FY2011, as many events do. The city waived $10,289 in fees for the event in FY2010.


For her part, Morrison, who requested the FY2012 and FY2013 numbers said that the smaller fee waivers are awarded to groups that are “really wonderful organizations” that are worthy community investments. She put South by Southwest on a different scale, and suggested that it needed to be evaluated on its own.


Major events represent a significant source of tax revenue for the City of Austin. Indeed, many argue that fee waivers are a small price to pay for a string of successful, coffer-filling events.


A study prepared for the city by its favorite economist, Jon Hockenyos of Texas Perspectives, looked at the broader economic impact of major events. In 2010 alone, Hockenyos found, music tourism was responsible for $28 million in city tax revenue. It was also responsible for more than 10,000 jobs.


“About a third of the economic impact (and more than half the City tax revenue generated) of the creative sector is attributable to tourism,” Hockenyos wrote.


Spelman told In Fact Daily that the fee waivers were worth the tax revenue brought in by the events that receive them. He noted that South by Southwest and the Austin Farmers Market account for roughly 80 percent of the FY2012 and 2013 waivers.


“We’ve got a lot of good information that says that South By puts (a significant dollar figure) into our economy,” he said, noting that the farmers market is “also a good investment.”


As for his typically not engaging in the practice, Spelman pointed to basic fairness. “The reason that I do not generally sponsor these is that I’m concerned about the arbitrariness of the practice,” he said. “And that a lot of events won’t come to our attention.”


Mayor Pro Tem Sheryl Cole saw the fee waivers as a necessary part of city business. “We have many events throughout the year in the city of Austin that engage, educate and inspire our community,” she said in an email to In Fact Daily. “These events are often a reflection of our cultural, environmental and artistic values.  The tangible and intangible return on these investments improves the overall quality of life for all of our citizens.”

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