Although Sen. Ron Rabin (R-Lee, Harnett) on Wednesday introduced a bill authorizing the city of Sanford to levy an occupancy tax on hotel rooms which would fund a local tourism development authority – a goal community leaders have had in mind for years, if not decades – don’t jump for joy just yet.
Rabin’s legislation doesn’t appear to conform to legislative guidelines laid out by the North Carolina Travel and Tourism Coalition, meaning that the bill could face resistance from the organization in one or both chambers of the state legislature.
Essentially, the state’s tourism lobby – which represents the hotels and motels charged with collecting the occupancy taxes levied by local governments – wants to ensure those proceeds are spent uniformly, in ways that will bring more people to stay in those hotels and motels.
“Over the past several years, there has been a greater effort to make the occupancy taxes uniform. In 1997, the General Assembly enacted uniform municipal and county administrative provisions for occupancy tax legislation,” the organization’s guidelines read. “These provisions provide uniformity in the areas of levy, administration, collection, repeal, and penalties.”
Further, the guidelines stipulate that “at least two-thirds of the proceeds must be used to promote travel and tourism and the remainder must be used for tourism-related expenditures.”
Rabin’s legislation, however, calls for one third of the proceeds to pay for maintenance at Central Carolina Community College’s Dennis Wicker Civic Center. While funding a civic center – which can be a catalyst for increased hotel use – arguably falls under the organization’s definition of a “tourism-related expense,” it could be a non-starter because the bill mandates the expenditure legislatively rather than by “the judgement of the Tourism Development Authority.”
Additionally, Lee County already levies a 3 percent occupancy tax of its own. Because that tax was enacted prior to the NCTTC’s efforts to make occupancy taxes uniform statewide, those proceeds already go to the civic center rather than any kind of tourism authority. Indeed, the Sanford Herald editorialized last year that it should be a priority to create a funding stream that “wouldn’t interfere with the revenues earmarked” for the civic center. And why should a city tax fund something that the county and the state are responsible for anyway? In any case, it’s not clear that CCCC has asked for any portion of the occupancy tax revenues to begin with.
Reps. Robert Reives (D-Lee, Chatham) and Brad Salmon (D-Lee, Harnett) introduced a version of the bill in last year’s long session of the legislature, but their legislation called for all proceeds from the tax to go toward the visitors’ bureau, which would have lined up with the NCTTC’s guidelines. That legislation was parked in a committee and hasn’t seen the light of day since.
Community leaders have been calling for the occupancy tax for some time. Both Lee County and the city of Sanford have stepped up to fund a portion of the cost for a Tourism Development Authority. The Rant hopes that Lee County’s representatives in the General Assembly can work together to get this bill right so Sanford and Lee County can get on about the business of marketing themselves.