Bed tax distribution generates debate for Prescott council
PRESCOTT - With most tax revenues showing little or no growth, the Prescott City Council had minimal leeway this week in much of its 2011/2012 budget - until it got to a discussion of bed tax money.
As has been the case in previous years, the revenue from bed tax (collected by hotels and motels) generated the most intense discussion during the Tuesday budget workshop.
This year's discussion centered largely on one projected bed tax expenditure: $67,355 toward the downtown parking garage.
To frame the discussion, the council received a breakdown of the city staffers' proposal for bed tax expenditures, alongside the proposal that the city's Tourism Advisory Committee compiled.
While the city recommended transferring $67,355 to help cover parking garage expenses, the advisory committee suggested a zero bed-tax contribution to the downtown garage.
Tourism Director Don Prince reported that the committee had reviewed the ballot language that voters approved in 2007, which raised the bed tax from 2 percent to 3 percent to augment tourism promotion and tourist-related projects.
After that review, Prince said, "It was difficult for the committee to see how (the garage allocation) fit in."
Councilwoman Tammy Linn voiced a similar concern, maintaining that use of bed tax for the parking garage was a stretch of the ballot language.
"People aren't going to come to Prescott...to see our great parking garage; they're not," Linn said. "If we put the parking garage on today, guess what? Sanitation is going to be on next year."
But other council members maintained that the parking garage would be a legitimate recipient of the bed tax money because it served tourism-related activities.
"If you shut down the parking garage, does that promote tourism?" asked Councilman Jim Lamerson. "There's more than one way to promote tourism."
Along with the parking garage transfer, the council also is considering the distribution of about $600,000 of additional bed tax money for a variety of uses, including the city's tourism and marketing promotion, local signature events, a rodeo grounds master plan, and the centennial celebration.
The council agreed to conduct another workshop on May 31 to continue its discussion of bed tax money.