A portion of the money should go to infrastructure improvements, such as roads, greenways and affordable housing, the speakers told tourism officials at the end of their monthly meeting in the Asheville Area Chamber of Commerce building on Montford Avenue.
The five speakers made the same point: that Asheville’s booming tourism economy doesn’t not pay employees a living wage in the city, and that city infrastructure is suffering from over-use. Changes in the way cities are funded, made by the Republican-led North Carolina General Assembly, are adding to the pressure, the speakers added.
The Buncombe TDA levies a 4 percent room tax, which it is required by law to use to promote tourism in Buncombe County, and for other “tourism-related expenses.” A proposed state law working its way through the N.C. General Assembly would increase the room tax by 2 percent.
It’s the first proposed Buncombe hotel room tax increase in decades, driven by a hotel building boom in Asheville. There’s construction planned on a dozen new and expanded hotels in Buncombe County, according to the TDA, with about 1,600 new hotel rooms expected to open in the next two to three years. That’s a 20 percent increase. That increase could drive down the average hotel occupancy rates and the average daily room rate that hotels charge.
“In 1983, it made sense to create a hotel tax and use it to promote the tourist trade,” said resident Heather Rayburn, who delivered the most eloquent and succinct address. “Afterwards, the industry boomed and brought many positives. But we’ve also seen many negatives as a direct result of your success – for example, higher municipal costs and an affordable housing shortage for your low-paid workers. so now the hotel tax needs to evolve to address the negatives,” she said.
Rayburn continued: “Today, it makes more sense for us to use the hotel tax to help pay for services used by your guests. Unfortunately, you view the hotel tax as an entitlement and not a tariff. But what other industry gets to tap into tax money to fund its advertising after overbuilding its market?”
“What was good for the community in ’83 amounts to corporate welfare today. You call this a ‘self-imposed’ tax. It’s not. your customers are paying it. And as a distraction, you also beat the drum about the amount of property taxes you pay,” Rayburn said.
The discussion regarding the proposed Buncombe hotel room tax increase and its use was done out of public view, Rayburn said. “You’ve deprived us of a well-earned, honest public deliberation and we’re mad. My taxes have gone up, partly due to your success, as well as the fact that Mr. Apodoca (N.C. State Sen. Tom Apodoca, R-Henderson County) is starving our municipalities of revenue and decreasing corporate income taxes. You’re winning all the way around. Your community is losing,” she said.
“Your actions stand as a slap in the face of every voter in Buncombe County. Now, what are you going to do to make this right? We want you to rewind and rework this business, and we want to see a just and acceptable compromise – in writing,” she said.
Buncombe TDA Chairman Bob Patel responded to the speakers, noting that the TDA had spent millions of dollars on amenities that touch “average citizens,” a group that he said his board cared about.
In a related note regarding the Buncombe hotel room tax issue, Asheville City Councilman Jan Davis, also a member of the TDA board, chastised Buncombe County commissioners for failing to give the Asheville-Buncombe Sports Commission a $45,000 allocation in its newly approved budget. For the past several years, Buncombe commissioners and Asheville City Council have each given the Sports Commission $45,000 to fund its efforts to attract and stage events such as the Southern Conference basketball tournament, high school softball tournaments and collegiate wrestling and biking events.
Davis said the cut by Buncombe commissioners was an 11th-hour move designed to force either the TDA or another entity to pick up the Sports Commission funding.