Monday, December 9, 2019 by Chad Swiatecki

Music commissioners want urgency, care in spending hotel tax money for industry

Members of the Music Commission and interest groups related to the city’s music industry are pushing for quick decisions on how to spend an initial pool of Hotel Occupancy Tax dollars that City Council allocated for the city’s commercial music industry.

At last Monday’s meeting, representatives from the groups Music Moves Austin and Austin Texas Musicians said the city’s growing affordability crisis is pushing more artists, venues and other music-related entities toward a state of insolvency, with the $3.5 million in annual hotel tax funding seen as a way to create a financial stimulus in the creative economy.

In September, Council approved the allocation that is tied to funding for the planned expansion of the Austin Convention Center, with the state allowing up to 15 percent of hotel tax revenue to be used for cultural arts purposes that bring money into the hotel and tourism industry. The new money for music came as a result of a 2 percent increase in the levy paid by hotel guests, providing a stream of funds music supporters have spent years lobbying for.

The Music Commission voted last month to create a 13-member task force, made up of nine members of the public and four commission members, to offer recommendations for spending the money in ways that fall within the parameters of state law covering the use of hotel tax dollars. That group was reorganized as a working group Monday because Council needs to take action to create a task force, which has a wider purview and can use city staff and other resources as needed.

Cody Cowan, executive director of the Red River Cultural District, pushed the commission and members of the working group to be diligent and careful in generating ideas for how to use the funding.

“Time is our enemy here in Austin when you’re observing affordability, whether we’re looking at small business or at the music economy. Time matters, and the longer this takes the more difficult it will be to retain talent in our economy in the shape that we see it,” he said. “Still, we need to take the time, since it’s been four to five years to get to this point, to get it right and make sure the horse is in front of the cart and that there’s a process, an organization and a well-informed vetting of that process about how this money will be used going forward.”

Commissioner Graham Reynolds countered Cowan somewhat, saying the working group should think broadly and ambitiously in the early stages, with guidance from the city’s legal staff and other experts coming into play later to make sure the recommended programs don’t violate state law.

“I wouldn’t worry about the cart or the horse, I’d send them all downhill as fast as you can. If you create a list of ideas, I wouldn’t wait on those,” he said. “As we put the structures in place I’d have it be a parallel process because it’s going to go so slowly to be painful, and then it will go even slower than that. The further along and the more we have ready, the better we are.”

The Music and Entertainment Division has scheduled a first public input session on the matter for Dec. 16, 2-4 p.m. at City Hall, with an online survey expected to be completed in the coming days on the city’s SpeakUp Austin website.

Division Manager Erica Shamaly said the first round of hotel tax money has been accruing since the end of September. She said staff members in the Economic Development Department and elsewhere have recommended deploying the money quickly to create pilot programs that can be evaluated as part of a more formal ongoing process in the future.

Rebecca Reynolds, director of Music Moves Austin and the city’s Music Venue Alliance, said the city’s decision to directly provide money to the local commercial music industry sets a precedent for a major city. That makes it important for the community to participate in the feedback process, she said, and for the working group to search for the best legal options for spending the hotel tax money.

“I am talking to people around the world who are watching us and want to know what the blueprint is, so they can sustain their own music economies going forward,” she said. “I and many others have been looking at the guardrails of what (state law) Chapter 351 allows and then we can find ways to squeeze things in there, as long as we run them past the legislative council and the hotel lobbying industry and all the people who have a stake in this money to make sure there’s no blatant misuse of the funds.”

Photo by atmtx made available through a Creative Commons license.

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Key Players & Topics In This Article

Austin Music Commission: The Austin Music Commission guides city practices on music development issues, including the SxSW music festival.

Hotel Occupancy Tax: A tax on the rental of a room in a hotel or other rental properties (including apartments) that cost 6 percent of the cost of a room.

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