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TDC POISED TO ASK FOR BED TAX INCREASE

Mar 20th, 2009 | 0

By LEAH STRATMANN

It was the decision of the South Walton Tourist Development Council (TDC) to ask for the support of the Walton County Board of County Commissioners (BCC) to approve a half-cent increase in the bed tax for the sole purpose of romancing a low-cost air carrier to the new airport in Panama City. An increase in tax from 4 percent to 5 percent was recently passed in Bay County for the same purpose and for a period of five years.
Billy Buzzett, vice-president of public affairs for the St. Joe Company, has been in negotiation with the airline the two tourist councils hope to attract to the Emerald Coast and was on hand to voice his support for the tax increase for the purpose of helping to market the area in tandem with the airline.
For much of the meeting, the airline name was not mentioned, until board member Mike Stange said, “We are talking about Southwest Airlines here, why not just say so?”
Buzzett acknowledged the truth of Stange’s comment and said negotiations seemed to be moving along nicely, but to date there has been no commitment on the part of the airline and said targeting a low-cost carrier will help to build Walton County tourism.
It was noted Bay County will begin collecting the fifth cent of tax in 60 days and the sooner the request of the TDC is brought before the BCC, the sooner the tax can be collected if the BCC approves.
TDC executive director Sonny Mares said the additional funds would ensure the already dedicated advertising funds will not be diluted. “These new funds can be used to good effect in targeting an airline. For instance, to penetrate one market like Chicago would cost around $2 million, which would take much of the current allocation. We will be working with neighboring TDCs in the marketing effort to attract an airline,” Mares said.
The Walton County Chamber of Commerce endorses asking for a fifth cent of tax to pursue the marketing effort, but board members said the fifth cent is the very last cent the TDC can assess and suggested caution be used since the marketing push is going to be a cooperative effort.
Board member Don McQuade said, “I don’t think the issues are clearly defined here. No one knows how much money will really be needed. The potential is tremendous. This airport probably will be the economic engine driving development in this area for the next 20 years. A one-penny increase equals$ 2.5 million. We have a resolution that says we are prepared to commit up to $l million. There is no clear definitive use for the remaining $1.5 million. In a difficult economic time, our customers are going to be asked to pay this tax increase. We need a clearer plan before going to the BCC.”
McQuade also noted a half-cent of tax once generated $2.8 million, but general decreases in tourism have lowered the ratio.
Mares said the TDC’s ad agency would be in talks with the airline to determine the financial needs to bring passengers into the plane and into this community. “We want the airport carriers to know how serious we are about getting new plane service to the area bringing tourists,” he stated.
“We better make sure this fifth cent is spent properly, because this is our last penny. I think we should pass a half cent increase and give 100 percent to the airline,” noted Stange.  “We think Southwest wants to come here and we want them here. If they don’t come, don’t pass the tax. I think right now we need to get behind this 100 percent, but a half cent should be enough.”
Board member Tim Morris said the issue was coming to a head anyway and passing an increase could help to add some additional services to the area such as ball fields and so forth. “Additional services will create jobs and the local tax watch group has said they will not oppose this increase,” he said. Use of additional funds for the development of cultural arts was also discussed.
McQuade pointed out the TDC should not be in the business of building sports venues and in reality even though sports fields might bring in visitors, in most instances those groups were not prepared to pay the going rates for accommodations.
At this point, board member Jennifer Steele Saunders said just the opposite was true with visitors seeking cultural events. “Those visitors have more money and are willing to spend it,” she commented.
Another board member, Ken Gifford, asked why the fourth penny of tax, which is earmarked for new product development, was not being spent on cultural development. “Let’s get some dollars out of that fourth cent. I don’t see any reason not to find the money from this resource,” he said.
Mares said part of the funds generated by the fourth penny could be used to fund international marketing. “When the airport opens, it is expected to bring in international charters. We know Fort Walton Beach, Bay County and Walton County need to be in that market starting this November.
“Let’s make sure we are in a position with dollars in the bank to negotiate. I’m hoping to start putting things together that start to add up and resonate to them there is a deal here. This is a tough market for them too,” he said.
Gifford made this motion to increase the tax by one half of one cent with up to one million devoted to the airline and without a sunset provision when the tax would expire, and for the direct purpose of a attracting a low cost airline carrier with national and international marketing to achieve that goal. The motion carried by a vote of five to three.
A second motion by board member McQuade directed the TDC staff to re-examine the budget to allocate funds for a feasibility study for a cultural arts center and/or sports venues. All passed the motion.
Mares will try and put the tax increase issue on the March 24 agenda of the BCC.
In other news, the treasurer reported bed taxes were up 5.76 percent for January 2009, but numbers were down 9 percent for the preceding three-month period.
Construction is proceeding on the Inlet Beach bathrooms and the expectation is the bathrooms will be complete for the bulk of the tourist season.
Brad Pickel reported the signing of the Omnibus Bill by the president should mean the $565,000 is on the way to the area for the completion of the beach nourishment feasibility study. He also noted he, Mares and Commissioner Scott Brannon will be meeting with the area’s congressional delegation at the end of the month to discuss beach issues and that this is the seventh year in a row the area has gotten money from the federal government for beach restoration.

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