Public safety, tourism impact behind Pless’ TDA bill
Haywood Rep. Mark Pless, seen here in the General Assembly on Jan. 29, has some ideas about TDA spending. NCGA photo
Last week, Haywood County Republican Rep. Mark Pless filed a bill that would strip the county of its ability to levy room occupancy taxes. Now, he’s revealed that the impact of tourism on public safety and tight county budgets are also a motivating force behind it.
“I think they are mismanaging that money,” Pless told The Smoky Mountain News. “It’s tax money and it’s accountable, but they don’t seem to be accountable; they just do what they want to do, so it’s time to go.”
Many North Carolina counties assess a tax on each room rented — whether hotel, motel, Airbnb or other such lodging establishment — for every night they’re rented. Those taxes are collected, accounted for and spent by a local tourism development authority that, generally speaking, puts the bulk of the money toward destination marketing efforts designed to put heads in beds.
In some places, like Haywood County, some of that money is spent on capital projects that not only help attract and entertain tourists but also serve residents.
North Carolina tourism development authorities derive their ability to operate from the General Assembly, which can also strip them of that authority.
The bill stems from an incident last year when the Haywood TDA awarded a grant to an organization looking to create a “diversity passport” listing LGBTQ+ friendly businesses in the county. A minor uproar ensued, mostly from businesses that could have religious opposition to such a directory but also from Pless. The grant was ultimately rescinded.
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Pless said he was satisfied with how that situation was handled, but at the same time, he requested years’ worth of data on how the TDA had spent money in previous years.
“I found some things that were very concerning,” he said, citing murals in Canton, Frog Level and Waynesville and a sign in Clyde. “That’s not what that’s intended for. That money is supposed to bring people to Haywood County. I understand that they want to use it for local things, but that’s not what this is for.”
Statute expressly permits “expenditures that, in the judgment of the Tourism Development Authority, are designed to increase the use of lodging facilities, meeting facilities or convention facilities in the county or to attract tourists or business travelers to the county. The term includes tourism-related capital expenditures.”
The grants for the projects Pless mentioned were approved in accordance with TDA board guidelines, so Pless appears to be questioning the board’s judgement of the ability of the projects to attract or retain visitors.
Haywood County’s current room occupancy tax rate is 4%. Since its inception in January 1984, the TDA has collected exactly $29,980,815 in room occupancy tax revenue through March 2022 — the first year the TDA began making substantial grants for local projects that totaled $500,000.
In subsequent years, collections have averaged roughly $3 million a year, a portion of which has continued to be used for capital projects like the murals, as well as a trail system at Haywood Community College, improvements to Lake Junaluska’s facilities and an auxiliary parking lot for Maggie Valley’s festival grounds.
“It not that the money needs to go away, it just needs to be spent for the proper reasons,” Pless said.
Jim Owens, chair of the TDA and a Maggie Valley alderman, was diplomatic in his response to Pless’ bill. Owens retired from a 50-year career in the tourism/hospitality/destination management industry.
“We welcome the opportunity to meet with Rep. Pless or any concerned party to discuss our finances and grant awards. We take our fiduciary responsibility very seriously and ensure that our spending fully complies with state occupancy tax law,” he said Feb. 24. “We remain committed to transparency and accountability in our investments that drive visitors to Haywood County and support our community’s long-term vitality.”
Anthony Sutton, a member of Waynesville’s Town Council, said he was also interested in opening up a dialogue with Pless to learn more about his proposal.
“I look forward to having a discussion with Mark about what alternatives he is proposing for our area if the occupancy tax is taken away and the necessity of a replacement of those funds to assist with the impact of tourism in our communities,” Sutton said.
Chuck Dickson, Sutton’s colleague on council, was characteristically frank in his assessment.
“I doubt that there is any support from the county or any of the towns for this proposal. In fact, the Haywood County commissioners recently praised the TDA plan to invest in long-term improvements for the county. The TDA is actively working to support and promote the local economy with tax money paid by visitors. I am puzzled as to why anyone would want to eliminate this valuable organization that brings in dollars to help the citizens of Haywood County,” Dickson said.
Maggie Valley and Waynesville collect the lion’s share of TDA revenue, owing to the lodging establishments in their respective jurisdictions. Leaders in Waynesville and Maggie Valley have both had their issues with Pless in the past, with Pless stripping Maggie Valley of its authority to regulate its extraterritorial jurisdiction. Pless has, however, been largely responsible for tens of millions of dollars in direct appropriations to Haywood County for recovery from Tropical Storm Fred in 2021.
As what’s called a “local bill,” Pless’ effort would need the assent of the local delegation — in this case, Sen. Kevin Corbin (R-Macon) and Sen. Ralph Hise (R-Mitchell) — and would not make a stop on the governor’s desk for a possible veto. Pless said he hadn’t talked to Corbin or Hise yet, but that he would in due time.
Corbin said he was aware of the issues Pless had with the TDA last year but hadn’t heard from him regarding his latest bill.
“I’d value input from local leaders as to how they think the money benefits Haywood County, and I look forward to discussing it with [Pless],” Corbin told The Smoky Mountain News. Feb. 23.
Pless’ long-term plan, however, is linked to the ever-increasing costs of local governance and the impact of tourism on the public services counties and cities provide. The theory is part of an ongoing discussion across the state — and across Haywood County — as to how TDA revenues can legally be spent.
On Feb. 17, Don Smart, president of the Haywood County Farm Bureau, spoke at a meeting of the Haywood County Board of Commissioners.
Smart has been the foremost advocate for preserving farmland and Haywood County’s rural character for some time now, and he told commissioners that while there were some good things about the county’s image as a tourist destination — jobs, mostly — there were some downsides, namely that development pressures are pricing locals out of the housing market and burdening them with the cost of infrastructure upgrades when visitors become residents.
“They build these houses, and we’ve got to upgrade and improve and enlarge, and guess who gets to pay for it? Us people that’s been there,” he said. “There should be a fee on those people. They want to come to Haywood County, and they need to pay for the cost of coming to Haywood County.” Smart went on to call for an impact fee.
Commissioner Tommy Long responded to Smart during the meeting, postulating that occupancy tax revenue could help local governments address the very real impact that tourists have on a small rural county’s services.
“These are very legitimate concerns this gentleman had — the increased traffic on our roads, the increased burden on our infrastructure, on our public county services like EMS, fire, volunteer fire departments, and I suggested part of the TDA funding — we draw all these folks in here and they put an undue burden on all of our volunteer services, all of our full-time services like our sheriff’s department — he called it an impact fee, I call it a user fee,” Long said. “This is something we need to work on in Raleigh. This is something that needs to happen. I and other taxpayers here in the county do not need to continually foot the bill for everybody else that comes in here, uses our stuff and leaves. It’s common sense. I make no apologies for lobbying for that kind of thing.”
Long spoke to The Smoky Mountain News after Pless’ TDA bill came out several days later,
“I’m not really in favor of throwing the baby out with the bathwater. I think there’s some really practical things that money could be used for. Tourism dollars do help our local economy, it’s part of the fabric of this community,” Long explained. “Our industrial base took a huge hit with mill; farming is a huge segment of our local economy, and tourism is huge. The pure tourism tax could be used for our local infrastructure.”
That, Long said, would take some of the burden off local taxpayers.
“This had act been talked about at North Carolina Association of County Commissioners meeting last year,” said Long, who serves as the NCACC District 17 director and as such communicates with county government officials from across Western North Carolina.
“This is not an original idea from me, but in talking with other communities across the state, this is a very practical way to spend that money.”
Currently, courts have taken a “strict constructionist” approach to language in statute that describes what constitutes a tourism-related expense, and what doesn’t. In 2024, an appeals court told Currituck County that its use of TDA revenue for public safety was improper.
On Feb. 24, Pless said that he’d be behind a push to change that.
“I’m open to changing that legislation, to take some of the burden off local governments,” he said.
If that happens, Pless added that he’d consider reinstating at least part of the TDA’s ability to levy taxes, to be used for that purpose.
