A bid to double the county’s 2 percent bed tax met with little support from county commissioners Tuesday morning, and while they backed taking it to a public vote, it may be too late for inclusion on the November ballot.
Commissioner Pinki Jackel’s back-to-back motions - to double the county’s bed tax and then to increase it by just 1 percentage point - both died for lack of a second.
Commissioners voted 4-1 to place the question of doubling the tax to a public referendum, with Commissioner Noah Lockley opposed.
A fourth motion by Lockley, to bring the administration of the Tourist Development Council in-house, failed by a 3-2 vote, with Commissioners Cheryl Sanders, William Massey and Jackel opposed.
County Attorney Michael Shuler is now scrambling to see if the matter can be added to a Nov. 5 ballot already scheduled to determine whether the county will levy an additional half-penny sales tax to fund indigent medical care in the county.
TDC Executive Director Curt Blair told commissioners the county needed to double the bed tax to maintain momentum from an ad campaign formerly funded by BP money. “The county could probably leverage as much as 3 percent but we have limited our request to 2,” he said.
He began with a short history of the TDC’s activities and their effect on tourism. He said revenue from the original bed tax had inched up slowly from its inception in 2005 until the 2008-09 recession. “In 2010 it started inching up again when the oil spill filled our rooms with workers,” Blair said.
He said bed tax revenue increased by 6 percent in 2011 and jumped 14 percent in 2012.
“That was the end of the BP money that funded the county with $1.2 million a year for those two years. We don’t have the numbers yet for the 2012-13 fiscal year but I can tell you they will be down,” said Blair, citing a rainy summer as part of the problem. He said hits on county websites are down, too.
Blair distributed lists of places the TDC has advertised and a breakdown of the use of funds since 2005. Of the $6.5 million collected since 2005, $4.6 million was spent on funding for community projects. Blair provided a breakdown of such funding, including nearly $1.3 million for grants to non-profits, $750,000 in visitor center funding, such as renovating the Coombs Armory, $500,000 to acquire the Lombardi seafood property, a half-million for park improvements, and $426,000 for beach cleanup.
Blair said tourists would not notice a change in the taxes they pay. He said visitors are already a major part of the tax base and estimated they contribute $850,000 to the general revenue fund in sales and gas taxes each year.
Blair said tourists spend $40 million on lodging here annually and half that much on food. He said more than 50 percent of the proposed tax increase would fund “out of area promotions.”
Blair said the TDC met with the SMAART Committee, an ad hoc group addressing restoration of the bay, to get seafood industry input on how the money could be used to promote the maritime trades. Ideas shared included funding a “seafood ambassador” program and recycling oyster shells from restaurants for use in the shelling program.
Jackel said the purpose of doubling the tax was to “promote year round sustainability.
“Nobody likes a tax but the beauty of this is that that 99.5 percent of the people in this room will never pay a penny of this one,” she said.
Jackel said visitors to the county use parks and roads and it is fair they should help pay to maintain that infrastructure. She said the increase would help the entire tax base.
Strong feelings, pro and con
The tax increase drew support from a number of quarters.
Apalachicola Commissioner Frank Cook, and Carrabelle Commissioner Cal Allen both encouraged the commission to boost the bed tax outright.
Apalachicola Mayor Van Johnson spoke on behalf of HCOLA and said that without TDC support, the annual festival celebrating African American culture would probably not take place.
Rex Pennycuff, owner of Eastpoint’s Fisherman’s Choice and the newest member of the TDC, called the tax hike fair. “On the aspect of bringing new people in, (the existing bed tax) has worked,” he said. “And it has expanded the season of my business.”
Alligator Point realtor Paul Parker, a member of the TDC, said he “personally witnessed a 31 percent increase in lodging revenues. This is one of Franklin County’s best opportunities for economic diversification
“The purpose of the increase is to eliminate the off-season,” he said. “The biggest growth we’ve already seen is in the shoulder seasons of fall and spring.”
There were naysayers too.
Ken Schoeder, owner of Apalachicola’s Bryant House bed and breakfast, disagreed with Blair that a bed tax increase would go unnoticed.
“People ask about the tourist tax,” he said. “There is no free lunch. If you think we can fund this county on the backs of tourists; we are going to lose that battle.”
Schroeder said the amount of time his guests spend here already has decreased from a weekend to a single night. He suggested adding a quarter percentage point to the current sales tax if more money is needed, or reallocating more of the existing bed tax to fight the off season slump.
“I voted for the original tax. It was a good idea. I don’t think we’ve spent the money the way we should have,” he said.
Bruce Hall, of Apalachicola, said she owns a rental house on St. George Island.
“I don’t think the tax already received has been properly used by the TDC. I would like to see the county promoted in a different way,” she said. “Target your audience and be respectful of your resources. Our environment is fragile; look at what has happened to the bay.”
Lynn Wilson, owner of Apalachicola’s Coombs House Inn, said doubling the sales tax is “a serious concern. I feel confusion in my heart and soul. We have to explain to the tourists. I have concerns about the manner in which some of the money was used in the past.”
Wilson sought a seat on the TDC board for a representative of Apalachicola’s 12 hotels, motels and bed-and-breakfasts. “Our expertise is never included in the TDC, which makes me sad,” she said.
Commissioner Smokey Parrish read a letter from the Apalachicola hotel owners reiterating Wilson’s plea for a TDC seat.
“Apalachicola has never been allowed to be represented,” he said. “Until we address these inequalities, I can’t support the tax.”
Ketan Vora, who recently purchased the majority of units in the WaterStreet Hotel, also opposed the tax increase. Vora said he is “a designated expert in the field of hospitality,” and has testified in state and federal courts as an expert witness.
“People do ask about taxes,” he said. “You may have noticed the people who are in favor of the tax don’t own a hotel. We are dealing with the guests firsthand and it will become an issue.
“Travel is already down. The timing of this is not appropriate with gas increases, rain and military furloughs,” he said. “It’s very convenient to push (the tax increase) off on visitors, but when they walk away with their money you will see a domino effect. I think there has been a disconnect in how (TDC funds) have been spent in the past.”
Jackel conceded that “we have made some mistakes. The TDC is learning. We’re never going to have 100 percent agreement but that’s no reason to kill this because we have made errors.”
Shuler said he would report at special commission meeting on Thursday. Sept. 5 on whether the referendum can be placed on the November ballot.
After the referendum was ordered, Lockley moved to bring the TDC administration, now handled under a private sector contract with Blair’s firm, under direct control of the county. Parrish seconded the motion.
“This needs to be worked out better. We’re getting a lot of complaints about people in Apalachicola not being represented on the board,” Lockley said.
Parrish asked if contracts for vendors, which comprise upwards of about 16 percent of the total expenditures, had ever been put out for public bid.
“I just want a process where everybody has the opportunity to bid,” he said. “One of the biggest complaints about the TDC is transparency. It shouldn’t be dominated by one section of the county.”
Blair assured commissioners that bids had been sought for contracted work.