Newman, local hoteliers split on occupancy tax changes

On the morning of Feb. 18, Jim Muth, executive director of the Asheville Buncombe Hotel Association, was prepared to make a statement that some community members and activists had been waiting to hear for a long time.  

“Over the past several months, the Hotel Association has been seeking input from the community, as well as our local delegation to the state General Assembly,” read notes written by  Muth and shared with Xpress. “I am here tonight to express the Hotel Association’s support for changes to the state law that governs the use of the occupancy tax.”

But the statement, which was intended for the Feb. 18 meeting of the Buncombe County Board of Commissioners, was never made. According to a Feb. 19 email sent to Stephanie Brown, president and CEO of the Explore Asheville Convention and Visitors Bureau, and provided to Xpress, Muth said he decided not to speak on the ABHA’s behalf after Commission Chair Brownie Newman indicated that he planned to beat him to the punch.

During the Feb. 18 pre-meeting of the board, Newman presented a letter, addressed to Buncombe’s General Assembly delegation, that advocated for reallocation of the county’s occupancy tax funds. State law currently designates 75% of the tax’s revenue for tourism advertising and 25% for tourism-related capital expenditures; Newman’s letter pushed for a 66% to 33% split along the same lines.  

Newman said that distribution, which would bring the county into conformity with state guidelines for occupancy taxes last revised in 2013, would likely be supported by the N.C. Travel and Tourism Coalition, the statewide organization that advised the General Assembly on the guidelines. That trade group’s support, he said, is likely necessary for any changes to be approved by the legislature.

While Muth and Newman agree on the need to shift the revenue allocation, the two differ on how a revised occupancy tax law should allow the nonadvertising piece of the pie to be used. Buncombe’s local ordinance currently limits that spending to tourism-related capital projects. 

Newman suggested that restriction should be lifted, allowing for nonadvertising funds to be spent on any “tourism-related expenditures.” He said that change, which would further align the local ordinance with state guidelines, could let local governments spend occupancy tax dollars on community needs such as sidewalk repair and public transportation. 

In his comments, Muth wrote that the ABHA also supports “expanding the flexibility” of the nonadvertising portion of the revenue. According to Newman, however, the hotel association wants to include specific language in the revised law that would require at least some of the funds to be spent on tourism-related capital expenses, rather than let their use be fully determined by the Buncombe County Tourism Development Authority board or elected officials.   

“I’m in agreement that we want to invest in capital and we want to invest in some noncapital uses, but I think that should be decided at the local level,” Newman told Xpress in an interview after the meeting. “Once we put it in the legislation, these things only get changed every five-10 years. If we put it in the legislation, then it limits our options at the community level to decide how the non-advertising funds would be invested over time.”

Newman added that he had engaged in informal discussions on the topic with some other commissioners but had not presented his letter until Feb. 18. No other commissioners have formally added their names to the document, but during informal discussion at the board’s premeeting, Jasmine Beach-Ferrara said she “would want to sign on to it,” and Amanda Edwards said she supported many of the points Newman made. 

“The good news — if you’re someone who wants to see the hotel tax law changed —  is that all parties seem to be in agreement,” Newman told Xpress. “They want to see the law changed, but at this point, we’re not on the same page about how to change it.”

With additional reporting by Daniel Walton