Swain ponders room tax increase
Swain County’s Tourism Development Authority will appeal to county officials for a 1 percent increase in the room tax rate.
The tax on overnight lodging currently stands at 3 percent. The proposed increase would bring in at least an additional $100,000 annually to support tourism initiatives.
Monica Brown, chair of Swain County’s Tourism Development Authority board, said the idea came from business owners who approached her about raising the tax. The extra money could help fund special projects without burdening local residents.
“Basically, there is a lot of capital stuff we would like to help the county with,” Brown said. “It would give us more funding to work.”
Such projects could include helping the Great Smoky Mountain Railroad construct an engine turntable or Bryson City restore the historic courthouse for a visitors center and museum. The extra funds could be used toward beautification efforts and signage near the Nantahala Gorge, the site of the 2013 World Freestyle Kayaking Championships expected to bring thousands of visitors to the county.
“(The tax is) more for promotion of tourism in Swain County overall and a main part of that is the appearance,” Brown said.
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The county can currently use up to 30 percent of its current room tax collections on capital projects, including the Christmas lights featured throughout downtown Bryson City.
A 3 percent tax is already tacked on to a visitor’s room rate. If someone pays $100 to stay the night in a Swain County hotel or inn, he or she will pay an additional $3, not counting sales tax, to occupy the room. If the increase is approved, that visitor will pay an extra $1 — for a total of $4 — each night.
Brown said the authority wanted to be “conservative” so it will only seek a 1 percent jump in room tax, although state law allows a room tax of up to 6 percent.
Jackson County has recently proposed increasing its room tax to the full 6 percent. More than half the counties in the state already levy a room tax of more than 3 percent, with a definitive trend in recent years among counties to increase the rate.
The Swain County tourism agency is “Right in line with what we are doing across the state,” Brown said. “And, an increase in the room tax is not going to impact the number of visitors to your area.”
The tourism authority has raked in between $300,000 and $353,000 a year in room tax revenue since at least 2006. Swain is one of the few counties that has escaped a downturn in its room tax collections as a result of the recession.
“We have enjoyed pretty steady room tax numbers in Swain County,” Brown said.
The tax has remained at 3 percent since its inception in the 1980s.
The extra 1 percent would be kept separate from the other 3 percent, which funds mostly marketing and promotions, said Karen Wilmot, secretary of the TDA board and executive director of the Chamber of Commerce.
The Tourism Development Authority splits its advertising dollars between print and online media. About 70 percent of the advertising budget funds traditional print ads, while the remaining 30 percent targets Internet users. Like other Western North Carolina tourism agencies, Swain County’s TDA focuses its efforts in North Carolina, South Carolina, Georgia, Florida and Tennessee.
“We tend to take a really conservative approach to our advertising,” Brown said. “We try to do a lot with a little bit of money.”
The key to obtaining support for the 1 percent increase will be reminding residents of how the Chamber of Commerce and tourism authority has used the room tax to benefit the county, Brown said.
“I want everyone to understand the focus of the tax,” Brown said. “How it benefits the community as a whole.”
But, in order to obtain the increase, the agency must appeal to local government officials and its constituents for support.
“I honestly don’t know” when the measure could be put to a vote of county commissioners, Brown said.
The tourism agency will need to discuss the possible increase with the county commissioners and then with its lodging owners before even thinking about the vote.
It’s a “lengthy procedure,” Brown said.
Mixed reviews
The idea of an increase received mix reactions from lodging owners in the county who had not heard about the possible change.
“I would not be wanting to add any more to my guest’s room fee than I need to,” said Ed Ciociola, owner of Calhoun House Inn & Suites. But, if it helps advance tourism in the county, he said he would approve of the rise.
A handful of inn, motel and hotel owners vehemently disapproved of the plan, however.
“I am definitely not in favor of any new taxes,” said Blain Slobe, owner of Two Rivers Lodge. “I don’t see raising the tax 1 percent as helping tourism at all.”
If people are spending more money each day on their room bills, they will cut down on the number of days they spend in Swain County, he said.
Several cited the still slow-growing economy as a crucial reason for forgoing the increase.
“I think 3 percent is high enough,” said Mercedith Bacon of West Oak Bed & Breakfast & Cabins.
Bacon said that the tourism agency does an adequate job with the resources it already has and that businesses are still fragile following the recession.
“I just don’t think this is the time,” Bacon said.
A couple of business owners said they would like to hear more information before deciding whether to oppose or support a 4 percent tax rate.
“I don’t think I can say yay or nay,” said Mort White, owner of Hemlock Inn.
Brown was not surprised by people’s responses when they initially heard about the potential increase and said she thinks the majority of business owners will eventually favor the move.
“I think there is almost a knee-jerk reaction” to oppose the tax, Brown said. “I think we just have to let them know what it’s going towards.”
By the numbers: Current tax rates
• 3 percent: Swain, Clay, Graham, Macon, Mitchell, Yancey
• 4 percent: Haywood, Buncombe, Transylvania, Cherokee
• 5 percent: Henderson, Madison, McDowell
• 6 percent: town of Franklin, Watauga
*Jackson County has proposed an increase to 6 percent.
Collection rate for Swain
• 2006-2007 $305,352
• 2007-2008 $320,820
• 2008-2009 $309,802
• 2009-2010 $335,353
• 2010-2011 $352,437
Share your opinion
The Swain Tourism Development Authority board meets at noon on the last Wednesday of each month at the Chamber of Commerce. This month, however, it will be held Jan. 18.
