County commission finalizes decision to allocate hotel tax revenues for conference center

On June 9, the Coffee County Commission approved funds from county hotel tax revenues – an amount of $74,000 – to cover the extra deficit of the Manchester-Coffee County Conference Center. The commission’s 15-6 vote finalized the move, which came with the recommendation of the Coffee County Budget and Finance Committee.

The additional $74,000 amount was necessary because Coffee County initially approved $126,000 for the center’s losses in Fiscal Year 2019-2020. But county officials had to approve a budget amendment to cover the actual losses, which would exceed the initially approved amount. Coffee County and Manchester City equally share the costs for the center, and county officials anticipated the total loss this year wouldn’t top $252,000 – the county’s part being half of that, or $126,000.

But Public Building Authority members say the center’s losses will actually be $399,000 – the reason for the extra deficit being the COVID-19 pandemic. PBA is the board that owns and operates the center.

Commissioner Rosemary Crabtree made the motion on June 9 to approve the funds. Commissioner Margaret Cunningham seconded the motion.  

Six commissioners were against county hotel taxes covering losses of the conference center. Commissioner Ashley Kraft was one of the them.

“I just want to make a statement that when we talked about hotel-motel tax for the county, we even specifically talked about it not going for the conference center,” Kraft said. “We stated that publicly.”

Commissioner Lynn Sebourn said that during the initial discussions about implementing the new hotel tax, it was stated that the revenues could go to the conference center.

According to the private act approved for the new hotel tax in Coffee County, “the moneys have to go to either industrial development or tourism, and the interpretation was the conference center fell under tourism,” said Coffee County Mayor Gary Cordell.

The new 2.5% county occupancy tax, also known as hotel or lodging tax, was implemented in 2019. The tax is collected countywide, including in the city limits of Manchester and Tullahoma.

In the two cities, the $2.5 rate was added to the already existing occupancy tax rates – 6% in Manchester and 5% in Tullahoma – resulting in 8.5% for Manchester and 7.5% for Tullahoma.

In rural Coffee County, the hotel tax is applied for the first time. There are currently no hotels in the rural part of the county.

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