Hotel and motel owners in Wilson County are not opposed to an Expo Center being built at the James A. Ward Agricultural Center, but they are opposed to the way it will be funded.
Greg Adkins, president and CEO of the Tennessee Hospitality Association, told The Wilson Post that the members of his association in Wilson County have reached out to him and “expressed very, very grave concerns over the proposal.”
Adkins said the fact that the county is proposing to fund a large portion of it by imposing an additional occupancy or lodging tax is disturbing.
Currently, Wilson County collects a 3 percent tax, while the City of Lebanon has its own 2 percent and Mt. Juliet has a 5 percent city tax. When you add these rates to the 7 percent state sales tax, plus the 2.25 percent county sales tax, the total occupancy tax rate for each entity is: Wilson County, 12.25 percent; Lebanon, 14.25 percent and Mt. Juliet, 16.25 percent.
“If you look at it, it’s almost as expensive as New York City’s hotel tax. You have a small county that's trying to have New York style tax rate from the hotel perspective, and that can be very damaging,” Adkins said.
In addition, he noted that the association “has little confidence that they’ll spend it appropriately. Currently, the way that the county and the cities spend the entire amount of the hotel tax is not on tourism or hospitality. They spend it on general government revenue.
“They could use that revenue and fund the center and everybody would be fine with that. But they want a new hotel/lodging tax,” Adkins said.
District 14 Commissioner Jeff Joines, who has spearheaded the push for the Expo Center, said that is not entirely true.
“The county is the only one of the group that has authorized 1 percent of its portion to fund the Convention and Visitors Bureau to promote tourism,” Joines said.
Although the county eliminated the CVB position almost a year ago, they voted in October to refund the position, but to place it under the umbrella of the mayor’s office instead of as a separate department.
However, that will not begin until the next fiscal year which begins on July 1, 2014.
Adkins said that while that was a positive move, “the entire amount really should be going toward promoting tourism.
“The county has never been able to prove to me what they spend it on. The deal is it's backwards,” he said. “You pass a lodging tax to enhance tourism so that people will come to your town, and they'll buy a Coca-Cola and hot dog and pay sales tax, of which 2.25 percent goes back to the county.
“You're creating an economic engine instead of just blowing the money on general government funds.”
Additionally, Adkins said questions remain because there hasn’t been an appropriate economic impact study done.
“I do know about the MTSU study,” he said. “But there's a difference between a survey and an actual study done. I don't think that it's an appropriate study.”
Adkins said asking just businesses in Wilson County “does nothing for the hotelier whatsoever. For us, everybody in Wilson County is not going to be in a hotel room. So they're trying to tax the very people that aren't even going to use the facility or get the advantage of the facility. I mean that's problematic.”
Joines said Adkins was talking about a study that no one has even seen yet, and that county officials directed Middle Tennessee State University Business & Economic Research Center, which did the study, to cast a net beyond Middle Tennessee.
“I wish people would quit talking about a study they haven’t even seen yet,” Joines said.
Still, Adkins contends “hoteliers do not make a multimillion dollar investment without a full economic impact study done – ever – for a private business.
“The one thing that I would hope to God is that if you're going to make a multi-dollar investment of taxpayer money, that you would have an appropriate economic study done,” he said.
“We in the business world would never, ever build a multimillion investment without having a proper economic impact study done.”
Adkins also noted that the opposition spans the county from hoteliers in Lebanon, as well as Mt. Juliet. He said they would oppose any increase in the occupancy/lodging tax, even 1 percent, and that the association will oppose it at the General Assembly, if the private act passes the county commission.
However, he said that if the county can prove to hoteliers that it makes economic sense and that the Expo Center will create tourism and “heads in beds,” and that the county “believes in tourism, we're not saying that we would always oppose this type of project.”