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Discord could jeopardize CVB funding: Plan would give city cut of 2-percent restaurant tax

 

 

From left, Robert Smith, Joe Max Higgins, Leroy Brooks, Harry Sanders and Stephen Jones

From left, Robert Smith, Joe Max Higgins, Leroy Brooks, Harry Sanders and Stephen Jones

 

 

Zack Plair

 

 

A political standoff is brewing between Columbus and Lowndes County, and the fate of renewing a 2-percent food and beverage tax for tourism hangs in the balance. 

 

Columbus Mayor Robert Smith said the city wants a share of collections from the tax, which for the last 10 years has been divided between the Columbus-Lowndes Convention and Visitors Bureau (85 percent) and the Golden Triangle Development LINK economic development agency (15 percent). 

 

In Fiscal Year 2017, the tax generated almost $2 million. The LINK received $210,000 -- roughly 10 percent of the organization's annual budget -- and the rest ($1,774,947) made up nearly all of the CVB's operating budget for the year. 

 

Smith wants the city to get a piece of the pie for Parks and Recreation, especially since Columbus and Lowndes County split into separate parks systems on Oct. 1 after previously operating a jointly-funded recreation authority. 

 

"Why shouldn't we get some of this tax revenue?" Smith told The Dispatch. "Ninety percent of the restaurants where the tax is collected are in the city. We're just looking out for the best interest of the city, and our priority (with the tax money) will be recreation." 

 

The current 10-year term for the tax, which collects 2 percent of prepared food and beverage sales at establishments that gross at least $325,000 in those categories annually, expires in July 2018. The Mississippi Legislature must renew the tax in its upcoming session to keep it on the books, but both the Columbus City Council and Lowndes County Board of Supervisors must first approve resolutions requesting its renewal. 

 

CVB Executive Director Nancy Carpenter and LINK Executive Director Joe Max Higgins both approached supervisors and the council in separate meetings in October asking them to approve resolutions. Their proposal would leave the tax divvy basically the same, except the LINK would receive a set amount of $250,000 instead of 15 percent. Neither body has approved the resolution. 

 

Smith did not say how much he thinks the city's share of the tax should be, but he did note his proposal would not affect the LINK's portion. He pointed as an example to Starkville, which breaks its restaurant tax up among several entities including 40 percent for parks, but noted he would not ask for nearly that amount. 

 

He plans to discuss his proposal with council members during their meeting on Tuesday, and then draft a resolution -- a process he hopes includes discussions with CVB and county officials. 

 

 

 

Tax in jeopardy 

 

District 37 State Rep. Gary Chism previously told The Dispatch he expects four-year renewals for special sales taxes for which there is unanimous local support through resolutions. Without a unanimous joint resolution of the council and supervisors, representatives with the city, county and CVB all told The Dispatch there is a risk of losing the tax altogether. 

 

That's a risk Smith said he is willing to take. 

 

"That's a possibility," he said. "I hope it doesn't come to that. I hope there can be a compromise." 

 

Though Carpenter said the CVB would "wait and see" what proposal the city would bring forward to her board, she warned losing the tax would be "bad for everybody." 

 

"You're looking at a devastating impact on economic development, quality of life and tourism," she said. "It would be a disadvantage for the city and county. It would just be very sad." 

 

CVB uses the tax money to recruit tourists and tourism events, which in turn generate sales tax revenue for the city beyond the restaurant tax, Carpenter said. The funds also support community festivals and city beautification efforts, among other things. 

 

Plus, the city keeps all the 2-percent hotel/motel sales tax for operations, which generates about $250,000 annually. That doesn't happen everywhere, Carpenter said. In fact, she said Tunica, Tupelo and Ridgeland -- to name a few -- dedicate all proceeds from both their restaurant and hotel/motel taxes for tourism. 

 

"To compare us only to Starkville isn't fair," she said. 

 

 

 

Board makeup 

 

Smith also wants to reorganize the CVB board of directors as a seven-member body, with five members appointed by the city council and two by the board of supervisors. The CVB board now includes nine members, with four appointed by the city, four by the county and one joint appointment. 

 

A CVB board member each comes specifically from the restaurant, hotel/motel and historic home sectors, with the other six serving "at-large." Smith wants to shed those designations and make every member "at-large." 

 

Smith said he believes the city has suffered "to a certain extent" from the current makeup of the CVB board, though he would not offer specifics. He noted, however, that collecting the majority of the tax that funds CVB should translate to appointing the majority of the representatives on its board. Approximately 94 percent -- $1,865,888 -- of the tax revenue is collected from restaurants within the city limits. 

 

The tax revenue has increased over 50 percent since 2008-09, when total revenues were $1.3 million.  

 

 

 

Brooks to reach out 

 

County supervisors on Tuesday tabled their resolution approval for a second time after District 5 Supervisor Leroy Brooks asked for an opportunity to approach the city and find out what exactly its leaders want. 

 

Brooks told The Dispatch the parks split -- in which supervisors abruptly voted to leave the Columbus-Lowndes Recreation Authority before having open discussions with city leaders on a way to keep the organization together -- left the city with a "bad taste." In the split, the county took control of rural community centers and the Lowndes County Soccer Complex near downtown Columbus. The city operates all other park facilities in the city limits. 

 

Communicating through the sales tax renewal process could help restore the city's and county's working relationship, Brooks said. 

 

"I'm not interested in continuing down the road where there is no dialogue," he said. "Whatever plan the city gives me, I will take it back and present it to the other supervisors. But if it's not something I'm satisfied with, I ain't gonna vote for it." 

 

 

 

Sanders opposed to any change 

 

Board of Supervisors President Harry Sanders, though, said he would only support the plan Carpenter and Higgins already presented, and he will demand a vote when the board meets again next week. 

 

He angrily lashed out at Smith's plan -- saying it would create a "slush fund" primarily for city elected officials. Threatening to kill the tax "unless they get what they want" would hurt the city more than the county in the long run because the CVB more directly benefits the city, he asserted. 

 

Further, county residents spend money at Columbus restaurants, he said, entitling the city to no special funding from the tax and no additional representation on the CVB board. 

 

"It's extortion, and I'm not going to go along with it," Sanders said. "Everything the city has touched is f***** up and gone to hell. I'll be damned if I'm going to let them f*** this up. They need to leave the resolution just like it is or I won't support it." 

 

Sanders also questioned why the city needs more parks money when upkeep for county parks is no longer part of the deal. 

 

"They want to take money from the CVB so they can build some damn public works thing or I don't know what," he said. "It's crazy." 

 

 

 

Parks plan, amphitheater maintenance 

 

Smith said Columbus Parks and Recreation director Greg Lewis is forming a facilities and maintenance plan that should be publicly available "in the near future." 

 

Specifically, Smith said the plan will outline improvements at Propst Park -- which he estimates will cost $1.6 million -- to top the priority list. The plan, he added, also will address needed improvements at community centers throughout the city parks system. 

 

The extra tax revenue, Smith said, will help keep the city's parks system "competitive." 

 

"Pretty soon, with the county pulling out, the city will be competing with the county parks," he said. 

 

Beyond parks, Smith said the city could use tax revenue for operations and maintenance at the amphitheater on The Island -- a location that can host concerts and other events once phase II of its construction is complete. Now the stage is built with open seating for free events, but the city is trying to raise money to add gates and permanent seating that will draw revenue-generating shows. 

 

Ward 5 Councilman Stephen Jones agrees with Smith that the city needs some of the restaurant tax money for parks. He said it could even contribute annually to street-paving projects, removing the need to issue bonds for those upgrades. 

 

Sustained growth the restaurant sector has seen in recent years, he added, would shortly eliminate any immediate "cut" the CVB would endure. 

 

As for how the CVB board is appointed, Jones doesn't believe that has to change. 

 

"As long as we have good people on that board, I don't care where they come from," he said. 

 

Bill Gavin, who represents Ward 6, said he thinks a compromise could be "lowering the floor" for establishments that must collect the tax to include those who make at least $100,000 from prepared food and beverages annually. That way, it would generate more revenue overall, and the city could get a cut without costing the CVB. 

 

Carpenter did not outright support that plan but she said she thinks removing the floor to include all businesses that prepare food and drinks is a good idea. She estimated that would capture revenue from as many as 50 additional businesses.

 

Zack Plair is the managing editor for The Dispatch.

 

 

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