FCEDC sets sights on bed tax

10/25/2012

By SCOTT AUST

By SCOTT AUST

saust@gctelegram.com

The Finney County Economic Development Corp. board indicated Tuesday that it thinks the local bed tax is its best bet to find additional funds to use for luring new business and industry to the county.

Scheduling talks between the FCEDC and the Finney County Convention and Visitors Bureau, which by county resolution receives all the bed tax funds, has been challenging due to conflicting schedules. However, officials are generally optimistic about working something out.

Earlier this month, the Finney County Commission essentially told the two groups to talk the issue over and come back at a later date with a recommendation.

For several years, the FCEDC has looked for additional funding to be able to offer incentives, like land purchases, to attract potential business.

Voters twice rejected a quarter-cent sales tax for economic development efforts in 2005 and 2007. For the past couple of months, the FCEDC has looked at the bed tax as a possible funding source.

The 6 percent transient guest tax, or bed tax, is an additional charge added by hoteliers to their normal room rates. In 2010, the county raised the tax to its current rate from the previous 4 percent, with all the revenue currently going to the CVB.

Based on the CVB's fiscal year ending June 30, revenue generated has increased from $341,167.72 in 2010 to $646,021.46 in 2011 and $699,605.08 in 2012.

FCEDC board member Bob Kreutzer said his group is not looking to take any money from the CVB's operating budget. The idea, he said, is for the county commission to create a type of reserve fund for any of the bed tax revenue that exceeds the CVB's budget. Then that money could be requested from the county commission and used for other purposes.

Finney County, the cities of Garden City and Holcomb and Garden City Community College pay for the FCEDC's current operating budget of about $250,000, Kreutzer said. The corporation is looking for additional monies for business incentives.

As an example, when TP&L came to town, it needed a place to build. Kreutzer said the county bought property using a loan from the Kansas Department of Transportation.

"What we would like to have in the economic development program is access to monies like that we could build into something like a revolving investment fund," he said, adding that it could be reused.

"To buy land, build a highway entrance, provide rail siting is very expensive," he said. "Our operating budget doesn't allow money to accumulate for something like that."

But, he stressed, the FCEDC is not asking the CVB to give up any of its current budget but rather to consider allowing excess revenue to be used by the county commission on other things.

"I think our request is about as mild as you can ask for in terms of changes. I'm hopeful they'll listen to us," he said. "It wouldn't be us that would get the money, it would be businesses coming to Finney County, and only if the commissioners approved it. That's a discussion we need to have."

Lynn Schoonover, CVB director, said her group is more than willing to talk about the feasibility of the FCEDC's request. She said there could be projects both groups have a stake in where it may be possible for the CVB to help with funding.

"I won't say it's outside the realm of possibility," Schoonover said. "We're certainly not opposed to having discussions with them to see if there is a possibility for us to help them fund things."

Schoonover said she does not believe the FCEDC intends to detract from or diminish how the CVB uses its budget.

The transient guest tax was increased to make Finney County comparable with the tax levied by surrounding communities. Schoonover said both Dodge City and Liberal had 6 percent bed taxes.

Revenues have been good since the increase.

"We've had a couple of very good years. We've had steady growth. But we had two very large projects last year. We had the high school construction and the bypass completion that contributed to the bed tax (through extended stays by workers on those projects)," she said. "There are a lot of things that went into that increase. It was expected, but with lodging, you never know."

Kreutzer said the groups are trying to arrange a meeting sometime in early November. But it won't be a speedy process, considering any change to the county resolution mean public hearings and public notices that could take a couple of months at least.

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