#9. County fails to get occupancy tax hike

By Jessi Stone Assistant editor | Dec 27, 2013
Sen. Jim Davis speaks to constituents in April about the proposed occupancy tax increase from 4 percent to 6 percent.

An important bill that could have helped Haywood County build new infrastructure and attract more tourists sits in legislative limbo until all stakeholders can reach a consensus.


Tourism booster

In early February, the Haywood County Tourist Development Authority floated the idea of increasing the county’s occupancy tax from 4 percent to 6 percent to fund tourist-attracting infrastructure.

The additional 2 percent was estimated to generate $425,000 a year for the TDA, which is about half of what the TDA already collects in bed tax. Mostly tourists and part-time residents who rent hotels, cabins, condos, and other accommodations for less than six months would pay the tax.

The change required local legislation to be passed, and Sen. Jim Davis, R-Franklin, introduced the bill into the Senate on March 13 and Rep. Joe Queen, D-Waynesville, introduced it into the House the same day to make the filing deadline.

It passed the first reading in the Senate on March 14 before being referred to the Committee on Rules and Operations. However, Davis then announced that he wouldn’t be moving forward with the bill without a community consensus.

"Due to a number of concerns, especially those expressed by many constituents, I have decided not to move forward at this time with this bill," he wrote in an email.

TDA, county commissioners and town boards in Waynesville, Clyde and Canton all backed the proposal but opposition popped up mainly in Maggie Valley.


Loud opposition

A number of citizens spoke out against any increase in taxes, and several hotel and motel owners in Maggie Valley were opposed, claiming it would only hurt their struggling businesses more if they increased the occupancy tax on their rooms.

Maggie Valley aldermen Phillip Wight and Mike Matthews were also opposed to the legislation’s wording because they felt it was rushed and didn’t give Maggie Valley fair representation.

The wording in the legislation called for the establishment of a Product Development Committee to review and evaluate proposals for tourism-related capital projects before making recommendations to the TDA board.

When the Maggie Valley Board of Aldermen first met to discuss whether to support the bill, the vote was 2-2 with Wight and Matthews opposing. To satisfy their concerns, a sunset clause was added to the legislation and the make up of the Product Development Committee was changed.

The committee would be made up of 11 voting members and four ex officio members — one member from each zip code and the remaining members would be allocated to zip codes contributing more than 10 percent of the total taxes collected in the previous year.

The four ex officio, nonvoting members include the TDA executive director, the

Haywood County manager, the county finances officer and the executive director of the county Economic Development Commission.

With the promise that their objections to the legislation would be remedied, Wight and Matthews agreed to support the bill just in time for Davis to introduce the bill. But the two aldermen changed their minds once they saw the bill that was filled in Raleigh. Matthews said he agreed to a six-year sunset clause but a 10-year clause was written into the legislation.

Others were against a sunset clause all together, including County Commission Chairman Mark Swanger. He said it would “inhibit the ability to plan long term and to borrow money” for tourism infrastructure projects.

But that is exactly why Wight and Matthews were against it — they didn’t want the county to borrow money against the 2 percent occupancy tax because it may put the financial burden on the taxpayers down the road.


Sports complex idea

While the additional 2-percent funding could be used for a number of projects, the project talked about the most was improving the sports complex in Canton. Adding more ball fields would allow the county to host more tournaments, which attracts hundreds of youth and their families to the area for two to three days.

According to statistics from the TDA, Haywood County lost about 1,100 hotel room stays to Buncombe County from one tournament series last year because the tournament play was split between Canton and Asheville fields. If the county had enough lighted ball fields to accommodate larger events, more people would stay overnight in Haywood instead of staying Buncombe County.

Since more than 50 percent of Haywood’s hotel/motel rooms are in Maggie Valley, it would stand to reason that Maggie would benefit from these tournaments more than the other municipalities. Those families would probably buy their fuel and food in Maggie as well, but many of the opposing hotel owners didn’t see it that way.

“You’re still creating a tax on people who aren’t here yet… we’re supposed to create an environment that will bring people in,” Wight said during a February board meeting. “Right or wrong I want to see the money spent in Maggie Valley.”

In a letter to the editor, Maggie resident Kyle Edwards said, “It should not be the responsibility of the accommodation owners to make capital improvements to county facilities.”


Davis’ final say

On April 4, Davis attended a public meeting called by Wight and Matthews at the Haywood County Republican Headquarters in Waynesville to discuss the legislation. More than 40 people attended the meeting, which was moderated by Republican Party Chairwoman Pat Carr.

Most people who approached the podium to comment asked that the bill be killed or postponed until changes could be made.

“I am against the way it’s gone through,” Matthews said. “I don’t understand why we couldn’t just take a minute to think ‘what can do a lot of good with the 2 percent that would benefit everyone.’”

David Blevins, a member of the Economic Development Board, was the only one who spoke in support of the legislation and gave examples of other sporting complexes in the state that were creating millions in revenue for counties.

“I’m not for taxes, I’m for economic development,” he said.

After almost two hours of public comment, Davis finally had a chance to respond. He told residents that their concerns were pointed in the wrong direction because he wouldn’t interfere with county-level decisions. He added that he agreed to sponsor the local bill if all stakeholders were in favor of it. It was clear to him after the meeting that there wasn’t a consensus on the bill.

Davis concluded by saying the bill would stay in the rules committee until he wanted it to come out.

“I have letters of support from the municipalities and the county, but it appears to me they need to get the lodging association in Maggie Valley on board,” he said during a follow-up interview in April. “These are the people that will be affected the most and they seem to want to know what the money’s going for and they’re concerned about the extra 2 percent.”

Since it was introduced in time during the General Assembly’s extended session, Davis said it could be put to a vote during the 2014 short session if a consensus is reached.