City should take careful look at tourism budget

Published 6:00 am Saturday, March 16, 2019

At Thursday evening’s LaGrange City Council meeting, several tourism partners approached the council to discuss the city’s tourism budget, which is generated from the city’s hotel/motel tax.

The budget, which has grown immensely in the last few years, has been a topic of conversation for several months. However, Thursday was another big step in that discussion, as area tourism partners asked the council to consider the creation of a local convention and visitors bureau to manage the tourism budget.

The budget is currently managed by the LaGrange-Troup County Chamber of Commerce and has been for approximately 30 years. The majority of the tourism budget comes from the 8 percent hotel/motel tax, with 5 percent of that tax earmarked for tourism use. A majority of that 5 percent — 3.5 percent — has to go through a ‘destination marketing organization’ or private sector, nonprofit 501(c)(6). 501(c)(6)organizations are not particularly common, as this section of the Internal Revenue Service code provides for the exemption of business leagues, chambers of commerce, real estate boards, boards of trade and professional football leagues. As the local chamber of commerce meets that qualification and has likely been one of the few in the county to hold that status, it has made sense for the council to allow the chamber to manage the budget. Essentially, it’s been left that way for three decades.

So, why is this now a topic of conversation after all this time?

Money. With the addition of Great Wolf Lodge to the community, the tourism budget is growing rapidly and is likely to continue to balloon. The revenue generated from the hotel/motel tax went from $564,253 in 2014 to $765,349 in 2018. The proposed budget for fiscal year 2019 assumes revenue of $990,775. If that numbers holds, the budget will have increased by approximately 43 percent in five years, and it is difficult to imagine it won’t grow further as Great Wolf attracts more and more visitors.

Of course, more money means more of a focus on who handles that money. As it should.

The chamber has pointed to the increased budget as proof that it’s doing a good job, a valid argument. The tourism partners — such as the LaGrange Art Museum, Pure Life Studios, the Biblical History Center and more — have argued to the city council that a larger budget means that the city should have an entity that focuses solely on tourism.

We think it’s a debate worth having. Any system that’s been in place and unchanged for 30 years could use a second look. Even if, after a deep dive, the result is the chamber continues to manage the tourism budget.

Maybe the city’s tourism has grown to the point that a separate entity should lead that effort and manage the growing budget. Or, maybe the chamber should continue to manage the budget and work with tourism partners on how best to divvy up those funds in a way that will benefit LaGrange overall.

The council has vowed to take a close look at how the budget is managed at its retreat at Great Wolf on March 26. We encourage it to do so. It’s not only important that the tourism budget is managed by a group that can give it the focus it deserves, but tourism partners also need confidence in the group overseeing it.