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City task force weighs new uses for hotel occupancy tax

Wednesday, March 1, 2017 by Syeda Hasan

With more tourists coming to Austin each year, the city’s hotels are generating more and more revenue. Some of that funding is set aside to support Austin’s tourism industry, and as the number of guests and hotels grow, so does that pot of money. A city task force is exploring new ways to spend the revenue.

Austin’s hotel guests are taxed 15 cents on every dollar of their bill. This fiscal year that revenue is expected to surpass $90 million. Some of that money goes to the state. The rest goes toward supporting the Austin Convention Center, the Austin Convention & Visitors Bureau and the Cultural Arts Division.

At a meeting Tuesday evening, the city’s Visitor Impact Task Force tossed around ideas about how that money could be used in new ways. One issue that is clearly at the top of everyone’s minds: the proposed expansion of the Austin Convention Center.

After a brainstorming session, city staffer Larry Schooler read off some of the group’s initial ideas.

“Expand convention center, consider and decide on whether to expand the convention center, and if yes, how to fund ….” Schooler read.

Task force members also proposed finding ways to direct funds toward parks and historic sites. For the past few years, Austin’s hotel tax revenue has been growing by double digits. That prompted District 8 City Council Member Ellen Troxclair to float the idea of using it for other facilities affected by tourism, and the task force is charged with exploring those ideas.

Tom Noonan, president of the Austin Convention & Visitors Bureau, said it’s important to consider that the recent growth in revenue could level off.

“I would tell you that I don’t think that’s sustainable long-term,” Noonan said. “So, I hope I’m wrong. It could be awesome if we’re seeing 13 percent more every year. That’d be incredible, but I don’t think that’s really the case. We haven’t asked the people who are paying the tax what their thoughts are.”

Tax force members agreed to hear from members of the hotel industry at a later meeting before making final recommendations on how to spend the money. During public testimony, the group heard from multiple speakers who supported the idea of a convention center expansion. Some others sought alternative uses for the revenue, including Bill Bunch with the Save Our Springs Alliance. The nonprofit works to protect the Edwards Aquifer and its system of springs.

“Most of our parks, like Barton Springs, have historic and cultural value, so we could be getting a two-for-one benefit if we were spending on what we consider to be important things to preserve what is immediately threatened,” Bunch said.

The task force didn’t weigh in on the merits of these proposals on Tuesday. They plan to issue recommendations to Council later this spring.

This story was produced as part of the Austin Monitor’s reporting partnership with KUT. Photo by Wikidiculous (Own work) [CC BY-SA 3.0 or GFDL], via Wikimedia Commons

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