Canton, Waynesville to consider room tax increases
Downtown Waynesville.
A tax bill sponsored by two western Republicans that’s currently making its way through the North Carolina General Assembly has the potential to bring even more room occupancy tax money to the town of Maggie Valley, but as other municipalities across the county and the region consider asking for potential inclusion in the bill, there’s concern over implementation and administration.
North Carolina’s room occupancy tax system has been in place for quite some time, and operates on a fairly straightforward principle. Whenever someone rents from a lodging establishment, a tax above and beyond the nightly room cost is levied and then spent on marketing or tourism-related expenses.
In Haywood County that figure stands at 4 percent. At least three serious attempts were made in the last eight years to raise the rate to 6 percent, but all three times they were shot down by then-Rep. Michele Presnell, R-Burnsville.
“To stay competitive, business owners could find themselves in a position where they would need to lower prices to keep consumer prices unchanged,” Presnell told The Smoky Mountain News back in 2013. “As for the argument that out-of-towners pay the tax and the tourism market can withstand increased prices, why couldn’t business owners raise prices without the tax? That way, they could invest in more jobs, higher wages, more products and services for their customers, etc. — it would be their choice, not the TDA’s.”
Now, the man who replaced Presnell, Rep. Mark Pless, R-Haywood, is a primary sponsor of House Bill 412 along with Bryson City Republican and fellow Western North Carolina representative Mike Clampitt.
When the bill was first filed on March 25, it was originally written very narrowly to allow Haywood County commissioners to increase that 4 percent rate to 6 percent, should they so choose. Another provision of the bill would have allowed the Town of Bryson City to levy its own occupancy tax, should that governing board so choose (see BRYSON CITY, p. 7).
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But after the bill came out of the Committee on Local Government on April 27, it had completely changed and was written even more narrowly, which counterintuitively broadened the discussion to other Haywood County municipalities.
As rewritten, H412 now deals only with the Haywood County town of Maggie Valley, a tourism juggernaut. Instead of allowing county commissioners to debate a 2-point increase for the whole county, the new bill would give the town of Maggie Valley the option to create its own Tourism Development Authority board and levy a 2 percent room occupancy tax of its own within town limits, above and beyond the countywide 4 percent (see MAGGIE, p. 8).
Although municipal TDA boards are uncommon, they’re not unheard of; Sen. Kevin Corbin, R-Franklin, has worked alongside the town of Franklin’s TDA for years and thinks it’s worked well.
“You’re probably to some degree duplicating some of the same efforts, but again, as a municipality, I have no issue with municipal administration,” Corbin said. “They have their own needs, and they’re obviously they’re promoting within the city limits, whereas the county is promoting everywhere, including in the city limits.”
Pless, a fiscal conservative who was a stickler about spending during his brief tenure as a Haywood County Commissioner, justified introducing the tax bill as a responsibility that’s part and parcel to his role as a legislator.
Tourism is an important industry in Canton, as well as throughout Western North Carolina. File photo
“My job as a representative is to represent the people in Raleigh, and this is the approach I have taken with it — they ask for [a bill] and if it’s not something that goes against the Constitution or goes against my moral beliefs, my job is to bring it home, so to speak,” Pless said. “So by entering it for them, it is their responsibility to levy [the room tax]. That’s not my job. My job is to make it available.”
Pless said he’s made the same options available to his constituents in Yancey County in a separate bill and has also reached out to the Haywood County towns of Canton and Waynesville.
“They have both expressed an interest,” Pless said. “They haven’t said ‘Yes, put me on it’ yet but they’re going to talk about it at their next meetings and if they decide to do it, then we’ll just amend it and add their names to it. Now that the language is in there, it’s pretty simple to fix.”
Waynesville Town Manager Rob Hites said he’d had an extended conversation with Pless regarding Waynesville’s possible inclusion in the bill, and that aldermen would likely consider the issue at a future meeting. One downside, Hites said, is that much like in other local government units, Waynesville struggles with getting enough volunteers for the various boards and committees it already has.
“If the town could act as its own TDA in this particular situation, I think that would be a bonus,” said Hites.
Waynesville Alderman Jon Feichter, who serves on the Haywood TDA board, said that the professionalism shown by TDA Executive Director Lynn Collins and her staff make the whole administration of the room occupancy tax look easy — but it’s not.
“Of the concerns that I have, the biggest one is the administration of the funding and having a municipal TDA board,” Feichter said. “What I have realized in fairly short order during my brief tenure on the TDA board is that promoting tourism effectively requires knowledge, skills and expertise, and the town doesn’t have any of those things. How are we going to fill that gap? That’s a major concern.”
Feichter also expressed concern that since the bill only applies to municipal town limits — as opposed to the zip code method used by the county’s TDA — it could lead to a competitive advantage for lodging establishments outside town limits that compete with lodging establishments within town limits.
Canton Mayor Zeb Smathers said that although his town doesn’t have a ton of rooms within municipal limits, his board would consider the issue at its next meeting.
“Our acting town manager is polling the board,” said Canton Mayor Zeb Smathers. “My understanding in talking with Rep. Pless is that he needs a sort of consensus before our next board meeting, so each board member is getting polled for their support on this issue.”
