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Thu, Oct. 17

Arts could suffer from bed tax revenue dip

PRESCOTT - The local arts community likely will feel the brunt from declining numbers in the City of Prescott's tax on hotels and motels.

Prescott City Council members learned Tuesday that because bed tax revenues continue on a downward trend, the city has less money than expected to allocate to the Prescott Area Arts and Humanities Council (PAAHC).

With only about four months left in the current fiscal year, the city is projecting that it will have about $65,000 to allocate to three remaining organizations, including the arts council, the Frontier Days Rodeo, and the Prescott Creeks Association.

The city had expected to allocate $30,650 each to the rodeo and the arts council, and $12,500 to Prescott Creeks. But officials emphasized Tuesday that the money was not available to follow through on the full allocations.

And even those earlier numbers had felt the effects of the declining bed tax revenues. In about October 2009, the city revised its bed tax-related allocations after revenues fell significantly in the first quarter of the fiscal year.

Originally, the city had expected to allocate $34,386 each to PAAHC and the rodeo, but later cut about $3,700 from both.

Now, the council is considering cutting thousands more from the contributions in order to fit in with even lower revenue expectations.

Overall, Budget and Finance Director Mark Woodfill reports that the city originally projected bed tax revenues of $594,000 for the current fiscal year. That number dropped to $558,000 in fall of 2009, and has now fallen to about $514,000.

Since the start of the 2009/2010 fiscal year in July, Woodfill said hotel/motel tax revenues have dropped by 19 percent. And over the past three years or so, the decline was about 26.5 percent.

The city and the Prescott Area Council for Tourism get the bulk of the bed tax revenue (at 40 percent each), while the rodeo, PAAHC, and the Christmas Courthouse Lighting (through the Prescott Chamber of Commerce) also receive shares of the revenue.

During Tuesday's study session, arts council member Elisabeth Ruffner appealed to the council not to cut the allocation for the arts.

PAAHC had planned to allocate its $31,650 to a number of local arts organizations and events, including the Phippen Museum, the Bluegrass Festival, the Prescott Strings, the Prescott Pops Symphony, the Smoki Museum, Tsunami on the Square, the Yavapai Symphony Guild, the Artists Path, Chalk It Up Prescott, and the PFFA Ghost Talk.

On Tuesday, the council directed City Manager Steve Norwood to come up with revised allocation amounts for the three remaining organizations. That recommendation will be back on the council agenda for the March 23 voting session.

The city generates its bed tax through a 3-percent tax on hotels and motels in the city.

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