Dividing the Hotel/Motel Tax ‘Pot of Gold’

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$1,405,392 is the amount of money collected in 2015 through Fannin County’s Hotel/Motel tax.  The projected collection for 2016 is $1,574,039.  The average growth per year in Hotel/Motel tax revenue is 11.83% – an increasing ‘pot of gold’ that legally must be divided between the the local government and the county organization designated to promoting tourism, which is the Chamber of Commerce in Fannin’s case.

This summer, the Board of Commissioners wanted to negotiate a new ratio for splitting up the Hotel/Motel ‘pot of gold’. According to state law, at least 40% of the Hotel/Motel tax must be spent on tourism efforts.  This leaves 60% of the revenue up for negotiation.  In 2011, Fannin received zero percent from the tax and the Chamber received 100%.  Now, in 2016, the County/Chamber split is 30% County and 70% Chamber.

The county wants to see the split be 40% County and 60% Chamber with the vision of working towards a 50/50 split.  When the topic was brought up at the Sept. 27th Board of Commissioners meeting, Chairman Bill Simonds said he would like to see the split be 50/50 because “we are wall to wall” with people in the city and “people know where Blue Ridge is.”  Post-Commissioner Earl Johnson said that he was in negotiations with the Chamber to increase the county’s portion of the revenue.

At the Chamber of Commerce meeting on Oct.19th, Jan Hackett, President of the Fannin County Chamber of Commerce announced the Chamber’s position on negotiating a change in percentages.  Quite simply, Fannin County is too late for 2017.  The contract between the county and the Chamber states that the county must give notice that it wants to change the contract six months before its renewal.  In effect, the county should have entered negotiations with the Chamber in winter, not in July.

The ‘pot of gold’ that the county gets to tap into comes without any particular strings attached for the county, unlike the Chamber which must spend all of its share on tourism promotion.  Currently, the county’s portion goes directly into the general fund.  At the Sept. 27th meeting, Post-Commissioner Johnson said he would like to earmark specific county projects for Hotel/Motel Tax revenue.  “I want to put the money into something we can all use.  We can touch and feel…we can say here is a project paid for by tourist tax.”

This spring, a couple of Fannin residents asked the Commissioners to do just that, pick a tangible project that could benefit the entire county and use Hotel/Motel revenue to do that.  During Board of Commissioners meetings and Blue Ridge City Council meetings, Fannin resident Joe Webb suggested to both to take a larger part of the ‘pot of gold’ and put it into building a library.

On the other hand, the Commissioners have also said that the Hotel/Motel tax is not the ‘free money’ it seems to be.  Increasing tourism means increasing the amount of money spent on public safety, road use and trash pickup during high tourist times.  And, there always needs to be some money in the back pocket to pay for incidental tourist expenses like the one EMA had last winter.  Hikers without proper cold-weather clothing and camping supplies got stuck seven miles out from the road in the Cohutta Wilderness and had to be rescued as their hypothermia set in.

The City of Blue Ridge also receives a portion of the Hotel/Motel tax that is generated inside the city limits.  Currently, the split is 40% city and 60% Chamber.

 

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