Occupancy tax bill on the backburner

By Jessi Stone Assistant editor | Mar 21, 2013
Photo by: Jessi Stone Many accommodation owners in Maggie Valley are against increasing the occupancy tax from 4 percent to 6 percent because of the struggling economy.

Sen. Jim Davis, R-Franklin, announced earlier this week that he would not be supporting the local bill to increase Haywood County's occupancy tax from 4 percent to 6 percent at this time.

"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," Davis wrote in an email.

Davis introduced the bill on March 13 in the Senate and Rep. Joe Sam Queen, D-Waynesville, introduced the bill in the House. County commissioners, town of Waynesville and town of Canton supported the concept of the tax increase, but many in Maggie Valley opposed the legislation.

If passed, the 2 percent would be used for capital improvements to increase tourism dollars. One idea presented has been to complete sporting complexes in Canton.


Consensus needed to move forward

Davis said he filed the bill because of the March 13 deadline.

“But my conditions for supporting it have not been met,” he said. “The appropriate parties are working on that to arrive at a mutually acceptable place and I won’t move on it until that happens.”

He said the bill was presented to him before the municipalities and other stakeholders in the county were on the same page about the legislation. Until that happens, Davis said he would let it sit there. He said it could take until next year’s short session to make that happen.

“A lot of pubic education needs to take place and each municipality and other parties have to agree on the concept and how the money will be distributed,” he said.

He said he received calls and emails from many constituents opposed to the legislation, adding that there were those in Maggie who were opposed and in favor of the tax increase.

Queen said he received more calls in favor of the legislation than those who were opposed, but he and Davis were still waiting to hear support from all the parties involved.

“I still think it’s a good idea because tourism needs the investment dollars. I’m still hopeful that my local folks will see the common sense in working together,” he said. “We’re not trying to run it over anybody. We’re trying to find something favorable for tourism and the lodging industry.”


Where the parties stand

Clyde Mayor Jerry Walker said the board of Aldermen didn’t take any action either way on the idea. He said the board wasn’t opposed to the idea of the increase, but didn’t understand the changes to the legislation language.

“We tabled it at the last meeting because they changed that thing every time we read it,” he said.

Canton Town Manager Al Matthews said the Canton Board of Alderman passed a resolution supporting the concept of the tax increase, but the specifics were not laid out. He suspects the many changes in language may have led to Davis being inundated with phone calls and emails in opposition.

“He was probably getting so much grief about the bill from all sides that he just became frustrated,” he said. “Hopefully everyone can come to a consensus that would be palatable to all parties or the vast majority.”

Maggie Valley Board of Aldermen first reached a deadlock when taking a vote on a resolution to support the tax increase, with Aldermen Phillip Wight and Mike Matthews opposing. Matthews later changed his vote after language was altered to include a six-year sunset clause and better representation from the lodging industry on the Product Development Committee.

However, Matthews said the language was changed again when it was introduced. He said he would have never changed his vote to approve the resolution had he known the sunset clause would be increased to 10 years and the committee composition would be changed to include anyone from the tourism industry.

“I don’t think it’s a bad idea to do it – I think it was forced down our throats,” he said.  “We need to all sit down and plan something that can benefit everybody.”

Wight said he opposed the legislation because he felt the Tourism Development Authority was trying to push it through too quickly and that it wouldn’t proportionately benefit Maggie Valley.

“I think it’s a very positive move and the best thing for Maggie Valley at this time,” he said about Davis’ decision to hold off on the bill. “I’m glad it was thought through and not rushed through with that much opposition to it. It’s obvious it wasn’t a good plan as presented.”

Commission Chairman Mark Swanger said he appreciated the work of Queen and Davis and understood that the county needed to come together before they could move forward with the bill.

“At this time there remains to be more work done to reach agreement between all the parties and I’m optimistic after we achieve that perhaps the bill will makes it back on track,” he said.

Swanger said he wasn’t in favor of having the sunset clause included in the bill because it would inhibit the county from planning long term and to borrow money to complete projects. He is not in favor of dividing the revenue in such a way that a major project couldn’t be completed to improve the tourism base.

“I personally would work to eliminate (the sunset clause) and I think many agree with that,” he said. “I think reasonable people understand that – but not everyone is reasonable.”

Wight and Matthews said they were opposed to the county borrowing money against the tax revenue to pay for projects over time, because then the burden is passed onto the taxpayers.

Marion Hamel, executive director of the Haywood County Hotel and Motel Association, said a survey was sent out to its members and 15 responses were returned. She said seven people said they were strongly opposed to it because a better plan was needed and the current dragging economy.

The other eight people said they supported the idea but were also concerned about the economy and the lack of a detailed plan for spending the new revenue.

"My personal opinion is that anything we can do to increase tourism is a good idea," she said.