Monday, August 29, 2005

What’s Fair is Fair

The attitude of some businesses, interest groups and even local officials toward the special lodging or occupancy tax is perplexing. It seems like such a win/win formula all around that it seems like they would want to emulate or replicate it elsewhere.

Lodging is one of a handful of businesses that have shouldered special taxes to self fund special uses. You know the old adage, special tax, special use; general tax, general use. Others include development impact fees and the fee on the telephone bill to fund 911.

Occupancy tax is what the special tax on hotels is called. It was pioneered in early 1980s in North Carolina to fund visitor promotion and marketing and relieve local governments of that responsibility. The formula is simple. The occupancy tax promotion is the pump to draw visitors, and local governments benefit from the far greater state and county sales taxes paid by visitors on not only lodging but also foodservice, shopping etc.

Over my 30 years, though, and not just in Durham, the attitude is rarely about emulating the occupancy tax formula to self-fund visitor promotion but instead how to divert it to other uses.

The easiest to understand is the dislike of earmarking by some elected officials. Some see it as tying their hands. I guess it's even understandable, though clearly hypocritical, that some businesses, while strongly objecting to a special tax on their businesses, are very eager to propose projects and uses that cannibalize the occupancy tax from its intended use.

While I empathize with local groups in search of sustainable funding sources, I have no patience with the rolled eyeballs and insinuations of envy that visitor promotion has a funding stream. Each could instead put those energies into emulating the occupancy tax model. They could identify groups of businesses and advocates that are related or complementary and jointly propose a special tax to self-fund these organizations.

In Durham, let's begin a dialogue on how to replicate the genius and self-reliance that underlies the occupancy tax to fund visitor promotion.

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