The Norman Transcript

March 29, 2013

Hotel tax taps into outside income

By Joy Hampton
The Norman Transcript

NORMAN — Transient guest tax, more popularly known as hotel/motel tax, taps into outside sources to boost city income. When guests visit Norman, the special tax levied on the hotel or motel where they are staying funds public arts, parks and tourism promotion.

Voters can vote on a 25 percent increase hotel/motel tax increase during the city’s election on Tuesday. If approved, the rate would change from 4 percent to 5 percent and begin May 1. Parks, the arts and Norman Convention and Visitors Bureau will see more money, starting in July when Fiscal Year 2014 starts if voters say yes.

“Attracting outside tax dollars builds Norman’s economy and quality of life,” Norman CVB Executive Director Stephen Koranda said. “This is not a tax that would be paid by Norman citizens but by those who stay at our lodging establishments.”

City leaders look at the hotel/motel tax as free money because it is generated primarily from visitors rather than residents of the city.

Unlike other sales tax, which taps into the purses of shoppers — whether they are Norman residents or visitors, the hotel/motel tax generates a funding stream from sources that stretch around the globe.

Even so, city leaders do not take increasing that tax lightly. Keeping the tax low enough to be competitive, especially with Oklahoma City and Tulsa, means Norman can bring in conventions and other statewide events.

In January, the Norman City Council voted to place a measure on the April 2 ballot to raise the current Transient Guest Tax. After careful study and discussion with local business and lodging owners, city leadership decided the conservative 1 percent increase will keep Norman competitive in the convention and conference market while increasing funding for parks, arts and promotion.

The current 4 percent Transient Guest Tax has been in place since 1980.

Half of the hotel tax collected funds the Norman Convention and Visitors Bureau. The NCVB works hard to promote tourism within the city and bring in even more outside dollars.

Additionally, NCVB works with the city in branding Norman — creating a positive image of the city that will attract businesses and other ventures as well as tourists.

The other half of the hotel tax is divided evenly between the Norman Arts Council and Norman Parks and Recreation.

The guest tax collected in FY 2012, which ran from July 1, 2011, until June 30, 2012, totaled more than $1.1 million. Raising the rate by 1 percent would translate to an additional $284,000.

According to the Oklahoma Tourism Recreation Department’s most current data, for every dollar spent on destination marketing, visitors will spend $59.

“When visitors come to Norman and spend their money at our businesses, it increases the city’s sales tax collections, which means more money for the basics like law enforcement, road repair and firefighters,” Koranda said.

Presently, the Norman CVB has the smallest operating budget of any CVB in the Big 12 conference.

The Norman Arts Council uses its hotel/motel funds to contribute to community events such as Jazz in June along with helping fund Sooner Theatre and the Firehouse Art Center, which provide arts education.

“The Norman Arts Council has been an excellent steward of these funds for the past 30-plus years and has used them to create a positive and substantial impact on Norman,” said Erinn Gavaghan, the NAC’s executive director.

Officials with the Norman Parks and Recreation Department said the additional money could be spent on court surfacing and new youth courts at the Westwood Tennis Center, which hosted a number of U.S. Tennis Association tournaments last year.

Other park improvements that could receive a boost from the tax include improvements to the Saxon Memorial Park, trail improvements, bleachers and additional parking at Reaves Park, additional parking and soccer field lighting at Griffin Park and improved event shelters and playgrounds.

Stephanie Brickman, communications manager of the Norman convention and Visitors Bureau contributed to this article.

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