Tourism Commission seeks answers on stalled hotel tax to fund homeless services

The Tourism Commission wants to take a hard look at the lack of progress on, and new considerations involved in, the long-discussed taxing district that could see large hotels contribute a new tax levy toward costs associated with homelessness.

Next month, the commission will receive a presentation from Scott Joslove, a former commission member and president and CEO of the Texas Hotel and Lodging Association, about the Tourism Public Improvement District that was first proposed in 2017 as a revenue source to address the public sanitation, housing and other costs faced by the city and organizations involved in assisting the homeless.

Discussions regarding the TPID have stopped and started several times before and after the Covid-19 pandemic, with the impact on the expected four-year reconstruction of the Austin Convention Center causing hesitancy in the hoteliers who would have to vote to self-impose the tax.

At this week’s Tourism Commission meeting, issues and questions included how and when the 1 percent tax levy could begin generating revenue.

Commissioner John Riedie noted that changes in state law have restricted how TPID money can be used compared to what was allowed when the mechanism was originally proposed as the city’s homeless population began growing and raising alarms among stakeholders in the local tourism economy.

“I would like to come out of that presentation understanding how the TPID will keep its commitment to providing resources for unhoused folks in light of the changes made by (House Bill) 1136 in the 2019 session,” he said.

“Prior to the 2019 session, proceeds from the TPID could be used for public sanitation, public safety improvements on sidewalks and streets, a whole list of things that every public improvement district is allowed to use its funds for,” Riedie said. “The bill that passed the Legislature in 2019 restricted the use of funds solely to marketing and promotion of tourism. So it reduced the ways you could use TPID money, and seemingly block that money from being used to mitigate homelessness.”

Chair Daniel Ronan and Commissioner Rachel Magee both said they want to know more about the route that the money generated would take – either first through the convention center or to the city’s Economic Development Department – with Ronan seeking clarification on how much of the new tax revenue could be used for purposes other than homelessness services.

In discussing other future agenda items, the commission also plans to revisit the stalemate between the city and short-term rental platforms that prevents proper regulation and collection of any Hotel Occupancy Tax for the city from the many STR sites operating throughout Austin. The STR issue has lingered because the city opposes STR companies’ agreements that would enable the collection of taxes but would prevent the disclosure of information on individual homes operating as STRs, which would allow for more robust enforcement of city codes.

The commission also plans to address concerns in the music community about the Live Music Fund, which was approved in 2019 by City Council as a mechanism to grow the local music industry but is being rolled out in its first iteration this spring as a grant program for local musicians and artists.

Riedie noted that his conversations with musicians and members of local music advocacy organizations suggested most weren’t interested in pursuing grants from the Live Music Fund, in part because they view the city’s guidelines and application process as too complicated.

“The Live Music Fund as implemented is not what the community or City Council expected when it was passed,” Riedie said. “What is being implemented is basically direct grants to musicians, and a lot of folks in the industry are dissatisfied with that … (a grant program) does not build an industry and does not have a multiplier effect. The hope had been that it would be invested in ways that would grow the jobs pool and benefit the rising tides.”

Photo made available through a Creative Commons license.

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