Restaurant tax: Mayor rejects LINK proposal dividing revenue

November 15, 2017 11:03:31 AM

Zack Plair - [email protected]


Columbus Mayor Robert Smith is rejecting a proposal to save a 2-percent restaurant sales tax, but he said he is open to continuing negotiations on how the tax revenue should be divided. 


Golden Triangle LINK CEO Joe Max Higgins submitted to city and Lowndes County leaders a proposal last week that would give each entity $400,000 from the tax for recreation, designate $100,000 to finish construction of the Sen. Terry Brown Amphitheater on The Island in Columbus, contribute $250,000 to the LINK's economic development operations and leave the rest for the Columbus-Lowndes Convention and Visitors Bureau for tourism promotion. 


The tax collects an extra 2 percent from customers on prepared food and beverage sales at businesses that gross at least $325,000 each year on those items. In Fiscal Year 2017, the tax raised almost $2 million -- 85 percent of which went to CVB and 15 percent to the LINK. 


The current 10-year term of the tax expires next June unless the Mississippi Legislature votes to renew it. Lawmakers have indicated that first requires matching resolutions from the city council and board of supervisors on how to divide the money. 




Money split 


On its merits, Smith said he rejects Higgins' proposal because he doesn't believe the county should receive any money for recreation from the restaurant tax. The city and county jointly funded the Columbus-Lowndes Recreation Authority until the county official split from that agreement on Oct. 1 to operate its own parks and recreation department. 


At the time county supervisors announced they wanted to split, Smith cited county leaders who said they wanted "out of the recreation business." 


"If that's so, why do they need $400,000 for recreation?" Smith asked. 


He also questioned why the county and city's shares of the tax would be even when 94 percent of the sales tax revenue generated came from restaurants located in the city. In FY 2017, records show businesses located outside the city limits generated little more than $100,000 in restaurant tax revenue. 


"Where's the fairness?" he said. "Why shouldn't our share be more than the county's? I'm totally against the county getting anything from this tax. But at the same time, if you compromise, it's a give-and-take situation. That may be something we have to give on, but I disagree with the county getting $400,000." 




Board makeup 


Another sticking point is the CVB board makeup. The city council has resolved to reduce it to seven members, with five appointed by the city and two by the county. Now, there are nine members, four appointed by each entity and one joint appointment. 


Board of Supervisors President Harry Sanders said, while he's willing to negotiate on the money, he is determined the CVB board makeup will remain as-is. 


"There's no way in the world I'm going to vote to give the city control of the CVB board," he said. "That's non-negotiable." 




A softened position 


Earlier this month, county supervisors passed on a 3-2 vote a resolution dividing the tax money only between the CVB and the LINK. At the time, Sanders said he would not support any variation from that plan. 


The city council, in its subsequent resolution, asked for 20 percent of the tax proceeds for recreation and $100,000 each year for the amphitheater. 


Sanders softened his position, he said, after talking to Higgins. Now, he thinks Smith and the council should do the same. 


Sanders said he's willing to negotiate down to $300,000 each for the city and county, leaving $200,000 more with CVB. 


"(Beyond that) what is there to negotiate?" he asked. "They are getting everything they want (except the board makeup). But we're not going to let them take (some of the money) and the county get nothing. ... We've got 40,000 people who live out in the county to their 20,000 in the city who are eating at their restaurants." 


Plus, Sanders cited needs with the county's new parks system where it could use the tax money -- among them working with the Mississippi Department of Wildlife and Fisheries to take over Lake Lowndes park and trying to convert the old Motley High School into a community center. 


"We're not out of the recreation business," he said. "We're out of the business of these super complexes that host tournaments and travel teams. ... That's not all there is to recreation." 




CVB response 


CVB received more than $1.7 million from the tax funds last fiscal year, and the restaurant tax revenue makes up more than 95 percent of its annual budget.  


Higgins' proposal could leave the organization with less than half of that amount. While Smith told The Dispatch that was "more than enough" for CVB to operate, Carpenter said such a deep cut to tourism marketing is "absurd." 


"It would be impossible for us to carry out our mission with half the funding," she said. "And it would be devastating to Columbus and Lowndes County if CVB no longer existed (if the tax is not renewed)." 


CVB markets and recruits large events, like sporting events and conventions, she said, which generates business locally -- especially for the 1,500 hotel rooms and 135 restaurants in the county. 


In 2016, Carpenter said, visitors spent roughly $118 million in Lowndes County. 


CVB also funds grants for local festivals and participates in a myriad of other tourism-attracting functions. 


For example, she said Columbus has already landed two large conferences for 2019 -- the Governor's Conference on Tourism and the International Order of the Eastern Star convention. 


"If we have less money, the community is still going to expect us to contribute on the same level we always have," Carpenter said. "Just like I don't go into other people's budgets and suggest what they can go without, I think it is unfair to suggest we can operate with half. We've done a good job with what we have, and (Higgins' proposal) makes it sound like we didn't need the money in the first place."

Zack Plair is the managing editor for The Dispatch.