Newman, local hoteliers split on occupancy tax changes

A CHANGE IS GONNA COME: Buncombe County Board of Commissioners Chair Brownie Newman presented a letter outlining his support for changes to the occupancy tax, including a reallocation of the tax's revenue distribution, during a Feb. 18 meeting. Photo courtesy of Buncombe County

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


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6 thoughts on “Newman, local hoteliers split on occupancy tax changes

  1. TDA is corrupt and must be stopped

    Not Enough.
    Repeal the Occupancy Tax. If the TDA is that important to the hoteliers they can continue to fund it from operations. Replace the tax with an annual license fee that the county can collect and use for the awful infrastructure in this county.

  2. NFB

    75% to 66% is really not a significant difference. What the county needs to do, as a start, is in addition to this reduction is to reduce the the 2% raise it made to the room tax in 2015.

    A few years before that when there was some discussion to raise the room tax from 4% to 6% and have the increase go to support local infrastructure the TDA was dead set against it on the premise that it would make hotel rooms too expensive and tourist would got to Myrtle Beach and Gatlinburg instead (as if either of those places have the Biltmore House, breweries, downtown Asheville, etc.)

    Then when so many hotels were being built and the TDA was in panic mode that there were not enough heads for all those new beds, they requested the county raise the tax so they could have more money to play with. Suddenly when the money was for them the TDA was no longer concerned about making rooms too expensive and the tax was raised.

    That increase could be rescinded as a way to put the TDA on notice that it needs to cooperate with efforts to get a portion of the room tax money to go towards supporting infrastructure that tourists use or that serious consideration of flat about abolishment is on the table. Unfortunately the TDA’s complete and utter contempt for the local yokels is too strong for them to be able to see anything beyond expanding their slush fund more and more.

  3. Andrew Weatherly

    When do we pull out the tar and feathers? TDA, you need redecorating. Brownie is being WAY too generous.

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