Who holds TOT tax wallet debated
A recommendation that the lodging industry take control of the room taxes it generates for promotions met with antipathy on Thursday during a meeting of the South Lake Tahoe Lodging Association Board of Directors.
City Councilman Bill Crawford told the board that the Lake Tahoe Visitors Authority should not be the entity to decide how those promotional funds are spent.
“I’m not opposed to the lodging association. I’m absolutely opposed to the tail wagging the dog,” he said referring to the LTVA and the city. Crawford attends the association’s monthly meetings to report on city activities.
“If there’s going to be a subsidy, and there is, then the lodging association should have the first call on that money (to promote the industry on the California side) rather than the visitors authority,” he said.
“The LTVA has lots of arguing and infighting. I think the lodging association could do a better job.”
Others felt the lodging association’s involvement with the LTVA programs indicated its support of that organization.
“Bill Crawford said it’s up to the city to decide, not the LTVA,” association President Pete Mac Roberts said. “That’s decided when the LTVA budget is approved.”
Following the meeting, Mac Roberts said that, based on several conversations with association members, there was no support for the idea of creating its own marketing program. Currently, individual association members work with the LTVA on cooperative marketing programs but the association itself does not put together advertising packages.
“It’s time the lodging association took a higher stand in favor of the LTVA,” he said. “There’s a very professional group of people in that organization.”
The association agendized the TOT discussion due to questions about whether the 2 percent promotional TOT was mandated or if the city council could divert it to other uses.
Historically, the city has allocated 2 percent of the TOT for promotions via the LTVA, South Lake Tahoe Chamber of Commerce and Lake Tahoe Airport. Six percent goes into the general fund and the remaining 2 percent, plus an additional 2 percent collected in the redevelopment area, goes toward redevelopment bonding.
Attorney Dennis Crabb, who sits on the association board and represented the city when the TOT policy was formed, told the lodging members that the “allocation of funds (for promotions) is discretionary, not entitlement. City policy has been to allocate 2 percent to visitor promotions.”
In a May 22 newsletter, Crawford supported using the tax for community services such as road repair rather than allocating it to the LTVA.
“I’ve seen the street rot in front of my house,” he told the lodging association. “The only way to get to be a world class destination is to make this a better place.”
Duane Wallace, executive director of the South Lake Tahoe Chamber of Commerce, said it was in the city’s best interest to maintain its promotional funding.
“Every dollar spent on marketing outside the city, gets $4 returned,” he said, quoting figures from the California Department of Tourism. “You don’t drink the water that primes the pump.”
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