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Travis County asks voters to approve future hotel tax for expo center

Tuesday, August 20, 2019 by Jack Craver

Travis County isn’t giving up on getting a taste of the hotel tax.

On Tuesday, the Commissioners Court voted to put a measure on the November ballot that, if approved, would authorize the county to levy a 2 percent tax on hotel stays to fund the redevelopment of the Travis County Exposition Center.

Even if voters approve the measure, it will likely be at least a couple of years before the county can impose the tax. Earlier this month, the Austin City Council voted to increase a separate hotel tax (which does not require voter approval) in order to fund the demolition and reconstruction of the convention center. The city’s action brought the total Hotel Occupancy Tax rate (9 percent from the city and 6 percent from the state) to 17 percent, the state maximum, thereby blocking the county from increasing the rate further.

The county must now wait for the city to finish paying off the debt associated with the previous convention center expansion, which voters in 1998 agreed to with a 2 percent hotel tax. Once that debt is paid off, that tax will expire, dropping the cumulative hotel tax rate to 15 percent and allowing the county to impose its own tax.

The current schedule has the city paying off the debt in 2029, but there has long been talk by city officials of paying it off as soon as 2021. In an interview with the Austin Monitor, County Judge Sarah Eckhardt said she is pushing for the city to pursue the earlier timeline and will meet with City Manager Spencer Cronk later this week to push that plan.

“Presuming that the city does pay down its debt in 2021, we must have this election in advance of that,” she said.

Eckhardt and three of the other four members of the Commissioners Court unsuccessfully urged Council not to move forward with the hotel tax increase earlier this month, taking the unusual step of appearing at a Council meeting to speak against Council’s action.

After Council ignored the commissioners’ request, Eckhardt called on the city for a “commitment” that would allow the county a chance to get a share of local hotel taxes once the debt is paid off. No city leader has yet committed to that request, but Council did vote the same day to direct the city manager to meet with county officials to discuss ways to move forward on the expo center and the preservation of the Palm School, another source of jostling between the city and the county.

Mayor Steve Adler said in an interview that he supported improving the expo center, but was not yet sure of the best mechanism.

“I don’t know yet the best way to do that or who should be doing that or how that should be funded,” he said.

As for whether the city should pay off the debt sooner, thereby freeing the county to implement a hotel tax sooner, Adler similarly said he wanted more information.

“We don’t have the financial models so we don’t know what that would look like or what is involved in that choice,” he said. “As that information is developed, it will be really public and the entire community will be involved in those discussions.”

Council Member Kathie Tovo, who is leading an effort on Council to stop the county from selling any part of the Palm School property to private interests, said she hopes the city and county can form partnerships around the Palm School, the expo center and “other areas of mutual interest.”

Tovo said she is “committed to exploring options for convention center expansion that would allow the city to retire its debt as soon as financially feasible,” so that the 2 percent hotel tax can “become available for other uses.”

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