Readers of this blog have seen tourism as one regular theme, as being but one tool in the regional economic development tool box. With Town Council's decision to retain 6.15% of a 7% lodging tax (earmarking just .15% or <$19,000 to promoting tourism in Christiansburg), it is becoming a hot topic again as we approach the annual budgeting cycle.
Especially given current economic conditions and the town's investment in other tools in this economic tool box (Rec Center, Harkrader Sports Complex and future Aquatic Center). Especially given the Montgomery County Chamber of Commerce shifting its focus to a wider member base, transferring "ownership" of Christiansburg's Wilderness Trail Festival to a local chapter of a nationally recognized civic organization.
In the past three months, there have been at least two references to council's long inactive Central Business District committee leading the charge -- not just for the central (downtown) district, rather for economic development for the entire town. Even the town's renovated website states this committee "considers matters of critical importance to the development and vitality of the Town’s commercial districts." Don't be mislead: this is a seismic shift.
To get some perspective of what is involved here, review some facts.
The
2008-09 budget allocated a projected $122,429 to the regional tourism initiative, per a contact put into place April 2007. One year later, council discussed changing this and in November 2008 voted to retain another .15% of those future revenues.
In the 2008-09 budget, revenue from all recreational sources totalled $525,000. This included $200,000 from the as-yet unopened Aquatic Center and a payment from Virginia Tech in the amount of $125,000.
In the 2008-09 budget, approved expenses for Parks & Recreation were $1,874,281 and $14,799,966 for the Aquatic Center. Granted, this budget included Aquatic Center construction costs, yet collectively these expenses represent nearly 47% of the entire budget for the town.
In the 2007-08 budget, approved expenses for Parks & Recreation were $1,980,000 and $4,492,310 for the Aquatic Center. Collectively, this represents nearly 27% of the town's fiscal year budget.
Do not add the 2007-08 and 2008-09 Aquatic Center budgets for a total. Some funds rolled from the prior budget year into the current one.
With Town Council still awaiting a
business plan for a project begun over 10 years ago, current net operational expenses for the Aquatic Center are estimated to be $1,500,000 per year. This is over and above the current or existing P&R budget of nearly $2 million.
Funds disbursed to the regional
Tourism Development Council each year (from when the higher lodging tax was put into effect July 1 through the date the .15% will be retained, or
nearly four years of participating in a regional tourism development initiative) represents
less than 1/8 of the town's
annual operational budgets for their recreation facilities.
The 2008-09 budget projected total lodging revenues of $850,000, and meals tax (prepared foods) revenue of more than $4.5 million (residents and visitors both tend to eat out).
Contrast lodging and meals tax revenues to the smaller $175,200 from building and zoning fees, or $2,876,100 from general property tax collections. It becomes clear business aligned to tourism contribute significantly to our local economy in revenue generation, before considering job creation or as amenities (economic tools) locals enjoy, too.
This blog was initially critical of tourism funding because it began before a solid plan was put in place by all the participants, ready for execution. After lengthy negotiations such a plan has been in place for over two years now and showing results. But now Christiansburg Town Council is electing to pull away, or out, and blaze its own trail to tourism revenues ... without a plan.
Because households are carefully counting their pennies and conserving -- and this in turn can contribute to the cycle of more business closures and unemployment -- residents need to think about what these amenities represent. Not simply as a percent added to all assessed real estate taxes, but also as contributions for attracting newcomers (business and residents) to Christiansburg, or pulling in regional shoppers, diners and actual tourists traveling through or to special events.
Economic development is admittedly complex, and encompasses far more than simply tourism. It involves more than just certain amenities within any single community's boundaries -- Christiansburg residents need to understand how regional assets and relationships affect their quality of life, and how their local economy is directly tied to the entire Southwest Virginia region.