Asheville's tax "deep dive" skims surface

Just as Asheville City Councilmembers started saying that they'd no longer be satisfied shaking down hoteliers for donations to the affordable housing fund, came the first hints of what their demands would be.

Namely: the Buncombe County Tourism Product Development Fund (TPDF). More specifically, the revenue created by the room tax.

Last month, Mayor Esther Manheimer said taxpayers are subsidizing the infrastructure needed to help maintain a city that hosts as many people as Asheville does. I call this the "Fat Tourists Are Breaking Our Sidewalks Argument."

"I think there's a tendency - especially in the hotel industry - to think 'We're building these hotels, we're going to generate this property tax revenue, we create jobs, and so on and so forth," Manheimer said. 

"This city collects around $64 million in property tax revenue every year, and it's the majority revenue source that balances our budget. And of that - hotels contribute $3.25 million. And I think in their minds in a lot bigger number - but it's not."

This, of course, only takes into account a single revenue source - property taxes. It's a ridiculously incomplete and misleading argument to use this single data point to assess the overall economic impact of the multi-billion dollar tourism industry.

The Mayor said City staffers were preparing a "deep dive" into the numbers, and would present their findings to the Council in November.

Well, yesterday we finally got a look at their work.

It was 67 slides in a Power Point that essentially re-stated the Mayor's single data point argument from last month.

It's the most incomplete assessment I've ever seen in my twenty years covering local government.

For example:

This slide is meant to show how little money the City of Asheville gets from sales taxes.

What the presentation does NOT show is how much the tourism industry pays in sales taxes.

So, while the Mayor and the staff presentation made sure to point out how much the hotels pay in property taxes, they didn't mention how much tourism generates in sales taxes.

My guess is about $8 million annually (based off the TDA's data).

Add that to the property tax revenue from JUST THE HOTELS and you get about $11 million.

How much does tourism COST the City?

If you're looking for an answer in this "deep dive" presentation, you'll drown before you find it. There is simply no mention of how much tourism costs.

What's more, the presentation misleads in its boosterism for the Mayor's pitch.

Look at this:

This is a pointless and insulting graphic that treats the reader like a child.

What are the COSTS of these services? Who uses them most? Am I to believe that tourists are coming to use the greenways? If so, how many? What kind of damage are they doing? Is neighborhood policing more costly than the (almost non-existent) downtown patrols?

And then there was this slide - which managed to be even more insulting:

Notice how the "property owners" have the big, fat, bolded PROPERTY TAX on it's side of the seesaw?

But aren't hotels property tax payers?

And, again, there is no accounting for the actual cost of services for each of the groups.

Are hotels generating more calls for service than residential? Than homeless shelters? Than multi-family apartment complexes? What is the average cost per call for service? 

We don't get answers to the basic questions needed to accurately examine the issue. Instead we get a dozen slides of photos and grade-school level graphics that mislead.

 Councilmembers should have been insulted by this.

This presentation was not designed to inform. It was designed to launch the PR campaign for the new taxes that the Mayor and the Council already know they want.

The unanswered question is whether tourism generates positive or negative net revenue for the City.

Here is a link to the full presentation.

Pete's Prep Sheet: Wednesday, Nov. 28, 2018

  • Last night, the Asheville City Council banned electric scooters from operating anywhere inside city limits.

  • NC Sen. Ralph Hise (R-Mitchell) will pay $4,500 in fines and penalties for problems with his campaign finance reports.

  • The NC State Board of Elections refused to certify the results from the 9th District Congressional election, hinting at illegal voting activities down in Bladen County.

Pete Kaliner

Pete Kaliner

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