Knowing the topic might be controversial, alderman Marilyn Howard asked her fellow aldermen and Manchester Mayor Lonnie Norman to consider restructuring where money brought in by the hotel/motel tax goes on Tuesday, March 5.
The hotel/motel tax in Manchester, which provides funding for the Recreation Complex and the Tourism and Community Development Commission, is at 6 percent. Howard proposed taking some of the revenue generated by that tax from tourism and putting it more in the general fund to improve roads, sidewalks and schools.
“I know that Ryan (French), you’ve done a great job in tourism and I’m not complaining, I know that the Rec. Center does great, but we have needs in our school, we have needs in our roads,” Howard said to French, who chairs the tourism commission.
“I’m looking at the damage that was done in the storm, even going down Old Tullahoma Highway,” Howard continued. “I read on Facebook that THP is going to fix it, that Benton Bartlett is going to fix it. No, it is going to fall on the city and I just feel like we need to change that formula.
“I know that it can be changed…the money that is brought in through hotel/motel, we need more in the general fund because the school situation is a real problem and we need to have it in reserve. We need to have it prepared. We’ve got students eating at 1:30 p.m. I believe some of that tourism money needs to go in general funds. I think we need more,” she concluded.
French is opposed to the idea of taking money from tourism. He believes, based on studies done by the state, that money invested in tourism is moving the county forward. He explained the state is pushing for cities and counties to reinvest in themselves and claimed that every $1 spent on tourism generates an $18 return, according to the 2017 Tourism Annual Report produced by the state.
“So if you take $1 and spent it on something else, you’ve actually spent $19 on something else and that’s why I’m against it,” French said.
However, he isn’t against Howard’s idea of restructuring.
“But the only thing we’re investing in the tax base right now is lodging tax,” French said. “I was actually going to second the motion for opposite reasons – I think we need to spend less in the general fund from lodging tax. I think we need to pull that out. Again, I think you’re marketing is a step in the right direction and I think projecting roads out of it is something that we should do. We can look at lodging tax and directly correlate it to a percentage of sales tax revenue.
“If we’re growing our sales tax at a rate of a third of our economy in seven years, we ought to have more funds to make those investments in schools, to make those investments in the roads and other things. That’s why I’m against it,” he continued.
“The long-term math doesn’t work – that’s not me saying that, that’s the tourism study that’s put out every year. It’s a $95 million industry in Coffee County…don’t’ whittle down investment. That will whittle down returns,” French said.
He explained tourism used to consistently have a $75,000 budget, but through investments into sports tournaments, it grew to $100,000.
“To me though, that’s kind of the proof in the pudding,” French said. “When those funds shifted and they went into let’s grow the economy with these funds, then we started seeing those results.”
French’s argument didn’t sway Howard away from the idea. She remained steady on the idea of needing more money in the general fund and believed the tourism commission would be the place to find some of it.
Alderman Mark Messick stepped in and asked if there was a way to cap the tourism budget every year, because, based on what French said, it is growing.
“What if we just put a cap on tourism. Would you be okay with that? So as it grows and as Manchester grows, they’ve still got money to spend, to help. So what if you say we’re just going to cap that at $100,000 every year? As we grow, we’ll have extra money that we can put into the general fund. It’s just an idea, I’m just throwing that out,” Messick said.
French wasn’t for it. He explained he would rather see more money from the hotel/motel tax allocated to the Recreation Complex, but lower the amount of property tax the site receives. The savings in property taxes would then go toward fixing roads, building sidewalks and improving the schools.
“I’m totally against putting schools on a fluctuating tax,” he said, in reference to using the hotel/motel tax to help fund academics.
Alderman Bob Bellamy suggested the board take a look at all of the options during a work session to figure out what would best support the needs of the community.
Alderman agreed unanimously to look at restructuring what is funded by the hotel/motel in a budget work session.