Thursday, June 13, 2024

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Graham’s mayor takes issue with formula for new municipal occupancy tax on hotels

The mayor of Alamance County’s county seat is apparently having some heartbreak over a proposed new hotel tax that promises to raise some additional funds for tourism-related endeavors in the county’s four largest cities and towns.

Although the city of Graham would be one of the beneficiaries of this municipal “occupancy tax,” Graham’s mayor Jennifer Talley has nevertheless taken issue with this prospective new levy over its admitted favoritism to communities that boast more hotels and motels within their corporate limits.

Graham mayor Jennifer Talley

Authorized under a newly-approved piece of state legislation, this prospective impost would assess a 3-percent surcharge on visitor accommodations similar to an existing room occupancy tax that’s assessed by Alamance County’s tourism development authority. But while the current levy is theoretically disbursed on a countywide basis, the proceeds from the new tax would pour directly into the coffers of the cities and towns that are home to the county’s hotels and motels.

Officials in Burlington have hailed this prospective new tax as a way to address a perceived imbalance in the traditional, countywide distribution of tourism dollars. Talley is emphatic, however, that this proposed allocation method is inherently unfair to communities that lure in their fair share of visitors but lack the means to accommodate these out-of-towners within their own borders.

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“We do put together events, like the Alamance County balloon festival, and national Dock Dog competition, that bring lots of people into the county,” Talley explained in an interview earlier this week. “But we can’t house all these people. So as event organizers, we book them into Mebane hotels and Burlington hotels, and the whole county benefits.”

Talley argued that the most equitable way to distribute the proceeds of a hotel tax would be to spread them around to all of the county’s cities and towns based on their relative populations. Barring that, she endorsed a distribution method similar to one used for the county’s existing 3-percent levy. This impost is ultimately doled out by a countywide tourism authority – with the lion’s share going to local visitors and convention bureau in order to market and promote local attractions, and the remainder passed on to Alamance County’s leaders to subsidize activities and organizations that bring visitors into the area.

The proposed impost, by contrast, would be administered by a municipal tourism authority that would operate under the effective control of officials in Burlington, Elon, Mebane, and Graham.

According to an agreement that these four municipalities have reportedly brokered, the proceeds from this 3-percent tariff will go straight to the municipalities where the taxpaying businesses are located. Under this distribution method, Burlington, which is home to 15 of the county’s nearly two dozen hotels and motels, would take in about $750,000 a year, while Mebane, with its five or so tourist havens, would also come in for a sizeable chunk of the funds.

Elon and Graham, which each have one hotel to their credit, would receive a proportionally-reduced share of the funds under this formula. In the case of Elon, these funds could amount to as much as $120,000 a year, based on estimates from the county’s finance department, although the town’s own administrators predict a much more modest return from the tax.

Talley admitted that she had been under the impression that the new levy would rely on a much different per-capita formula until after the enabling legislation had already cleared the General Assembly on October 25.

“Before the legislation was pseudo-agreed to,” she added, “we said this is what we wanted, and I understood that the occupancy tax would be distributed based on population.”

Talley added that, at one point in the deliberations over this measure, the county was supposed to have served as a clearinghouse for the revenue from the new occupancy tax.

She noted that the county was eventually dropped from the process. But how the final distribution method took shape is something that she acknowledges continues to puzzle her to this very day.

“We need to work together in an honest and forthcoming way to promote Alamance County,” she said, “and being told about a change in the legislation after it has already passed is not the way it should be done.”

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