Time to Question the Tourist Product Development Fund

By Leslee Kulba

“Taxation without representation is tyranny,” sloganeered the Revolutionary era legislator James Otis. American colonists charged the practice violated their rights as Englishmen, and it was one of the 27 grievances listed in the Declaration of Independence. It was just assumed that, if a potentate could levy taxes only as high as his constituency agreed was reasonable, he’d be less likely to compel them to lives of slavery, making bricks without straw for mighty pyramids to his honor.

It’s totally different today in the United States, though, right? Cities and counties tax tourists, who don’t vote in local elections, because collecting taxes from visitors represents a revenue stream for balancing budgets without making residents, who do vote in local elections, angry enough to vote the bums out.

But some local governments, like Asheville, do so well at attracting tourists to pay taxes, at least according to former City Manager Gary Jackson’s classic whitepaper, tourists still don’t pay their fair share for the wear and tear to which they subject the roads and sidewalks and their overutilization of public safety services. So, Asheville and Buncombe County have, for at least a decade, been struggling to find a balance.

In North Carolina, tourist taxes must be enacted by legislation that sets the rate and parameters for use; and local tourist development authorities select specific projects for funding. In Asheville and Buncombe County, visitors overnighting in any kind of commercial lodging accommodation are charged a 6% occupancy tax on top of the 7% sales tax they pay.
Revenues collected from Buncombe County’s 6% tax are expected to reach $25 million this year. Most of the tax’s proceeds pay for advertising to attract tourists, but 25% of the collections go to the Tourism Product Development Fund. This fund provides financial assistance for capital projects marketed as magnets for tourism, like theaters and sports parks.
The TPDF was the largest source of grant funding in Western North Carolina prior to the creation of the Dogwood Trust. Since 2001, it had awarded $44 million to 39 projects. Some of the bigger winners include the John B. Lewis Soccer Complex; the Asheville Wayfinding Program, famous for the signs that peeled in the first iteration; Pack Square Park, with its delays and imbroglios; the Asheville Art Museum, where calls for transparency were made a campaign issue by mayoral candidates; the US Cellular Center; Enka sports facilities; River Arts District redevelopment; the Asheville Community Theatre; and the Woodfin Greenway and Blueway.
Last year, those who mange the fund gave a couple awards to projects promoting African-American culture. This year, they’re taking a hiatus.
Stephanie Brown, CEO of the Convention & Visitors Bureau, spoke about the “monumental shift” before the Buncombe County Commissioners. The tax has not been abolished, but instead of making disbursements this year, the TDA is power-verbing a “proactive” and “collaborative” process.

It’s how government works these days. The coordinator identifies stakeholders, gets them into visioning sessions, gives the public a chance to comment and feel included, prioritizes and refines ideas in more meetings, and then solicits funding and contracts.

But because that sounds like the standard format for, “Let’s not and say we did,” big words must be used. First, the process has to be “more strategic” and “exciting.” Then, there are the “synergies,” and O, how they’ll “resonate.” Sometimes government discussions can sound like a contest to see who can say “community” the most. And, of course, any money changing hands is not spent, but “invested in the community,” with multipliers.

Instead of accepting applications and selecting winners, the plan calls for articulating what the community is told it wants and essentially taking RFPs. Brown spoke of “investing” in projects for 10 years or longer and perhaps even financing them with debt.

The objective was to stay within the letter of the law while using tourist taxes for projects the city and county would otherwise support with an increase in property taxes or a discontinuation of services, either of which actions could jeopardize incumbents’ chances for re-election. For example, Brown said what the commissioners would call “infrastructure,” the TDA would consider “place,” as in “placemaking.”

In response to a line of questioning from Chair Brownie Newman, Brown said just because ideas brainstormed don’t fit with the definition, it doesn’t mean somebody wouldn’t be motivated to seek other sources of funding or bend the ear of representatives to amend enabling legislation.

To summarize, the city and county are taking tax dollars from non-residents to save up for debt service on a major infrastructure project, as the public is made to feel inclusive with touchy-feely magic words and a dazzling process. In retrospect, will we, like county whistleblower Tim Flora, say, “We trusted when we should have questioned. And when we did question, we let ourselves be convinced”?

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