Hoteliers want higher taxes

Last night at the Missoula City Council meeting, while we were all waiting for the vote on the zoning update, we were treated to a dog & pony show put on by one of Montana’s biggest economic interest groups. The mainly-government-funded Convention & Visitors Bureau (CVB), along with a number of hoteliers in town, trotted out their presentation for a Tourism Business Improvement District (Tourism BID). Some would call this a fee, others would say it is corporate welfare, while yet others would it a subsidy. Me? I name it a tax increase.

In a nutshell, every person who stays in a hotel within the City limits would be charged 75c per room per night. That money is then assessed on the Property Tax bill, collected by the City Treasurer, and handed over to the CVB to spend. How the Tourism BID monies are spent is then decided by a Board of 5-7 hoteliers who are appointed by the Mayor (although board members can only be hoteliers).

Unfortunately, this is not a local idea. Not only are we supposedly playing catch up to other tourism markets (Billings, Spokane, etc.), but CVB’s all around the country are pushing this approach. (In fact, the presentation given to City Council last night was based on a state-wide template: How to Lobby for a TBID.) It is sort of like an arms race – because the other guys are doing it, so must we. And according to State law, the local CVB must be the Tourism BID manager. So, it is no surprise that Barbara Neilan, Sage Grendahl, and an assortment of CVB board members (past and present) all urged council to support the idea! Beneficiaries of other Missoula BID’s, such as the Missoula Downtown Association, the Missoula Redevelopment Agency, and the like, also came out in support of the model.

I’ve never quite understood why city council has to get involved. If it is such a good idea for development of the tourism industry, then I’m surprised that the tourism businesses don’t get together and form a Tourism Chamber of Commerce, levy a fee on themselves, and go right ahead and market away. Instead, the city has to get involved and force every hotel guest to cough up the dough.

So, what is the money going to be spent on? According to a Missoula CVB brochure, about a quarter of the money will be spent on adding new staff to the CVB with the majority of the rest going towards assorted marketing costs (branding, research, branding, web site optimization (!), and trade shows).

Listening in last night, however, it seems a major concern is the underwriting and sponsorship of events. Maybe they’re talking about events at the MEC (Missoula Events Center), but since that hasn’t yet been built, let alone approved and funded, I guess they can’t say that. Instead, it seemed to boil down to paying organizations to bring sporting events (mainly state high school championships) to Missoula. I wonder if they’ll also be giving money directly to the Women of Faith conference, the NRA regional gun-show, or a Moveon.org/FreedomWorks gathering, as well?

Nary a whisper last night of who is going to pay for the infrastructure necessitated by all these tourists in our town. If there’s a whole bunch more people driving around town, we’ll need to pave, repair, and plow our streets a bunch more. If all those tourists are downtown eating and drinking their hearts out, then I suppose we might need a few more police to keep an eye on them. And with all those wallets just bursting at the seams with money to spend in the oh-so-cute downtown boutiques, I suspect we’ll see more panhandlers that might then need accommodating for the night. Who is going to pay for all those city services, then? Us, of course.

And that’s the rub. Instead of this tax going into the general city coffers to be divided up as our elected officials see fit, you and I will have no say or influence in how the CVB spends the Tourism BID revenues. As one speaker mentioned last night, how do we know the CVB is the best qualified group to manage and disperse the funds? According to some hoteliers I’ve chatted with, there is no way they would support the Tourism BID if the city council, or even Missoula City, had any control over the Tourism BID funds. They point to what happened to the Statewide Tourism Bed Tax once the state legislature got a hold of it. (Err, instead of it all being spent on tourism advertising, it was also spent on the assets of the state – state parks, historic preservation, historical society, and the Lewis & Clark Bicentennary, etc.)

However, I can perfectly understand why some of the bigger hoteliers like the idea of a Tourism BID. It is a tax that someone else pays (the hotel guest), that someone else enforces (the city), and that they (the industry) gets to spend. Wouldn’t want to trust the voters or their elected officials to do what’s right, would we? I think we could call it taxation without representation.

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One Response

  1. […] boondoggle pitching to Missoula is the Tourism Business Improvement District . Bunk in the West has the […]

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