City allocates hotel-motel room tax to visitor groups

 

By BRENDA BROWN

knhedit@kilgorenewsherald.com

Four organizations will split the first $277,000 of the new fiscal year’s hotel-motel tax receipts and after that others may benefit.

As part of the city council’s consent agenda Tuesday night, members unanimously approved agreements between the city and the Chamber of Commerce, Kilgore Historical Preservation Foundation and the Texas Shakespeare Festival that spell out the amount of money each will receive in fiscal year 2009-2010.

The Main Street program will receive $10,000 to fund its “Fridays After 5” concert series, but since it is a city entity there will be no contract.

The chamber, which doubles as a convention and visitors bureau, receives the lion’s share — $197,000 or 71.12 percent of the tax revenue, whichever is less.

KHPF and TSF will each receive $35,000 or 12.64 percent, whichever is less.

Last year, the city’s hotel-motel tax receipts totaled $276,000, said Jeff Howell, city manager.

“This year we’re projecting the hotel-motel tax will raise $277,000,” Howell said.

Three new hotels were constructed and opened during the past year, but the uncertain economic outlook for the city and the nation has left the council and city manager wondering if more rooms will necessarily translate into more tax revenue.

Howell said after the meeting that the council may use its discretion to disburse any additional tax revenue raised during the course of the coming year to any entity that puts “heads in beds.”

“We have three new hotels, but without any history of occupancy, we don’t feel like going out on a limb to think we’re going to bring in so many more dollars, so we’ve budgeted conservatively,” Howell said.

In 2008-09, the chamber received $196,875, and KHPF and TSF each received $35,750, so all three lost a little funding for the coming year.

Earlier this year, Joe White, executive director of the East Texas Oil Museum, and Dr. Bill Holder, Kilgore College president, petitioned the council for a piece of the hotel-motel tax revenue, but the council did not budget ETOM into the coming year’s tax allocations.

“The council has said if (hotel-motel) occupancy is above and beyond what we anticipate, then they can revisit the Oil Museum issue later on,” Howell said.

Howell said the chamber receives the most each year because it advertises and promotes all Kilgore events and attractions, including ETOM and TSF.

In May, White and Holda told the council the museum hasn't operated in the black since 2003 and KC picks up the financial slack.

White said the goal has always been to draw 50,000 to 60,000 visitors annually, but since 2004 the museum has averaged about 25,000. The museum has been dipping into reserve funds but that reserve has also dwindled, he said.

Located on the KC campus, Holda said ETOM operated in the black for 23 years but other attractions, including the Texas Freshwater Fisheries Center in Athens, and TAKS requirements have diminished some of its student field trips attendance. Capital improvements to the museum, including a new roof and central air-conditioning, also helped to deplete reserve funds.

The occupancy tax of 7 percent is paid to the city each month by the hotels and motels inside the city limits.