Published 9/21/2012 in Local News
CLARIFICATION: The time frame of the fiscal years for the Finney County Convention and Visitors Bureau budget and the collection of transient guest tax were unclear in a previous version of this story. The CVB budget operates on a calendar fiscal year while the fiscal year for guest tax collections runs July 1 through June 30.
Board holds off on decision whether to help fund FCEDC.
BY RACHAEL GRAY
The Finney County Convention and Visitors Bureau on Thursday tabled the discussion of possibly sharing a percentage of the transient guest sales tax, known as a bed tax, with the Finney County Economic Development Corp.
The bureau has brought in record revenue from the tax the last two years, primarily because the tax increased from 4 to 6 percent in the spring of 2010. During the 2011 and 2012 fiscal years, the tax generated $646,021.46 and $699,605.08, respectively, with the new 6 percent tax rate. That's compared to $401,046.28 and $341,167.72 in the 2009 and 2010 fiscal years.
The CVB budget operates on a calendar fiscal year while the fiscal year for bed tax collections runs July 1 through June 30.
"This is the first calendar year we're able to see the (full) gain on those receipts," said Lynn Schoonover, director of the bureau.
Representatives from FCEDC came to the bureau's meeting on Thursday to ask whether the board would consider sharing some of the additional bed tax revenue.
CVB's budget for 2011 was $462,000 and the actual income was $625,629. The budget for 2012 is $854,976.
Expenses have gone up for the CVB and they continue to spend more on advertising — from $49,076 in 2011 to a budgeted $179,000.
Because of the increase from 4 to 6 percent, Schoonover said, the CVB has been able to support new events and entertainment, and advertise for hoteliers and conferences.
"We've been able to have a greater presence in media," she said.
Tom Walker, FCEDC board chairman, said the FCEDC could benefit from some of those dollars to pull in potential businesses to the area, which in turn could help stimulate the bed tax even more. He said it's a compliment to the hoteliers in Garden City and Finney County that visitors have quality space to do business.
Walker and FCEDC President Lona DuVall have said that Finney County is not a tourist destination, but is a business destination and needs to continue to be.
Walker proposed during Tuesday's Finney County Commission meeting that splitting that bed tax revenue in half between both organizations would allow the FCEDC to have more capital for incentives for both existing businesses and new businesses. He said that it could be providing a small business with a revolving loan, tax credits or other types of incentives.
Walker and DuVall have said that in preliminary discussions with the CVB board, the proposal has been met positively and that the commission would just need to approve the change in the allocation of the funds.
CVB board members on Thursday discussed the possibility of splitting those funds and determined they needed to make more budget projections for the fiscal year 2013 before making a decision.
One concern was whether the bed tax would continue to be strong in Finney County.
Several hoteliers at Thursday's meeting said business has been slowing a bit during the business week.
Neil Kapadia, owner of America's Best Value Inn, said in a separate interview that it may be too early to distribute or share funds with other entities.
Kapadia said he's been in the business long enough to know hotels have ups and downs. He said this is the first year with the 6 percent tax.
"It's too early for anyone to come and ask for a share of it," he said.
Kapadia did say industry is important for his business and others to thrive.
Schoonover said the FCEDC could possibly request grants for certain projects or events, like other community entities must do in order to receive money from the CVB.
She also said some of the excess money could be used for projects that the CVB can stand behind.
"We could be deciding what should be done with those funds since we're the ones generating them," she said.
In a separate interview, Schoonover said she sees the need to fund FCEDC.
"I certainly see the need to fund FCEDC. We'll just have to see how our board feels about funding them, to see if that's our responsibility to support them. That's the role of the board — to make that decision," she said.
Schoonover said she doesn't know if the increases will continue.
"Because of the increase in the percent, we've had an increase in revenue. We don't know what other years will look like. This is the first year with the entire 6 percent," Schoonover said.
The CVB will meet at 1 p.m. Oct. 18 in a location to be announced.
Found 3 comment(s)!
It's not their money!
The TAXES collected by hoteliers does NOT belong to the hoteliers or CVB. Other businesses do not get to decide how the sales tax they generate is spent. This decision belongs to the COUNTY COMMISSION, not the CVB board. This board has operated without accountability for too long. The County Commission needs to step in and use these TAX dollars in the best way for the entire county, not just a few (self-serving) hoteliers and CVB staff members.
Posted by: BizPerson on 9/21/2012
Greedy FCEDC, going after CVB's money because you can't get your own sales tax passed. Shame on you. The whole idea of increasing the bed tax was to provide CVB with more money, if you take half now they are left with less than before.
Posted by: GC Advocate on 9/21/2012
They have to remember one of these years we still had the 3I show to bring in money and we lost out on that deal because we refuse to do anything to get a nice building for events...
Posted by: GCResident on 9/21/2012