Pless makes dramatic change to controversial TDA bill
Rep. Mark Pless is finally giving the Haywood TDA something they've been requesting for almost a decade.
Cory Vaillancourt photo
Now that it’s been presented to the House Finance Committee, a bill filed by Haywood Republican Rep. Mark Pless that would have essentially abolished the Haywood County Tourism Development Authority looks much different.
In an abrupt about-face, the bill presents Haywood County commissioners a choice — raise the room occupancy tax from 4% to 6% but cut out all official municipal involvement in the agency, or do nothing and maintain the status quo.
“The intent is to help Haywood County. That was the intent all along,” Pless told The Smoky Mountain News May 20. “But needing time to navigate what's in the best interest of Haywood County, the only thing I had time to do was to introduce a bill to abolish it and then amend it when it went into committee the first time. I've been working on that part of it ever since I filed the bill.”
Commissioners set the room occupancy tax rate up to the maximum permitted in enabling legislation. The county collects the tax and then remits it monthly to the TDA, minus collection costs. Last year’s net was roughly $3 million. If trends continue and the bill passes, that total would be well north of $4 million.
“We’re feeling fantastic,” said Corrina Ruffieux, executive director of the TDA. “It’s a huge win for all of Haywood County. Tourism is a big piece of Haywood County’s economy, and this will afford us the opportunity to lean into that and into our master plan.”
Essentially paid by tourists, the tax must be spent in very specific ways.
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After overhead, the TDA must spend two-thirds on travel and tourism promotion, and one-third on tourism-related expenditures, including capital projects.
Revenue from each of Haywood County’s five zip codes — Canton, Clyde, Lake Junaluska, Maggie Valley and Waynesville — is tracked, and 75% is spent to promote the county as a whole, while the remaining 25% is divided into essentially 10 “pots” of money. Each zip code gets two “pots” for travel and tourism promotion and one “pot” for capital projects. The size of the pots is proportional to the amount of money collected.
Each one of those five zip codes, except Lake Junaluska, is an incorporated municipality, so each of the four town governments has a voting representative on the TDA board who also serves as a liaison to their own municipal governing board.
The TDA’s governing board consists of 15 members — one from each of the four municipalities, three from lodging establishments with fewer than 20 units, three representing lodging establishments with more than 20 units, two representing tourism-related businesses and a total of three nonvoting representatives — one each from the Haywood County commission, the Haywood County finance office and the Haywood County Economic Development Commission.
Pless’ bill proposes a new board of eight by cutting the nonvoting representative from the Haywood County Economic Development Commission.
“Our economic development director needs to spend their time bringing in industries or bringing in large manufacturers so that we can have jobs for those folks that are not in the service industry. This is just a waste of time having them there because they're not going to make an impact,” Pless said.
One representative from each lodging category and all four of the municipal representatives are also on the chopping block. The municipal representatives wouldn’t be needed, as Pless wants to do away with the little pots of money dedicated to each zip code.
“The zip code idea, from some of the folks I've talked to in the towns, is not a good idea for two reasons — it's hard to get the money that is in the zip codes, and when it comes down to representation, there's no real representation in how that money is being utilized, so they can go in and spend it at whatever they would like to spend it at. But it still has to comply with two-thirds advertising, one-third capital,” said Pless. “So if you take the 1%, which is relatively small in comparison to the full the other 3%, they weren't getting enough money to really do anything, so there was no reason to continue that when you can go and put it all together. And now they have the full two-thirds, one-third across whatever amount the county chooses to enact.”
Additionally, of the remaining two representatives in each lodging category, one would have to come from either the 28751 (Maggie Valley), 28785 (Jonathan Creek) or 28786 (Waynesville) zip codes, and one would have to come from either the 28716 (Canton), 28721 (Clyde) or 28745 (Lake Junaluska) zip codes. The same residency qualification also applies to the two representatives from the tourism-related business category — one from the east, and one from the west.
The representative from the Haywood County commission would be elevated to a full voting member.
“I believe you need to have someone that has taxing authority that is making a decision, and since this is collected county-wide, it needs to be the person that is there with the board of commissioners, because they are really the only one there that has the taxing authority for everything in Haywood County,” said Pless. “I feel the towns didn't represent themselves very well, and we're using it kind of like a slush fund, but I do not believe the county commission person that is assigned to the TDA board will do that.”
The chair, elected by the board, would also become a full voting member. Now, the chair votes only in the case of a tie.
But the changes to the board and the zip code spending stipulations would only take effect “when the Haywood County Board of Commissioners adopts a resolution levying an increase of the room occupancy tax,” per the bill. If commissioners do not levy a new rate, everything stays the same.
“I think the 6% is a good idea,” said Kevin Ensley, chair of the Haywood County Board of Commissioners. “We’re competing with Buncombe and Jackson counties, and they both have 6%. This levels the playing field.”
Regarding the loss of municipal involvement, Ensley echoed Pless in saying that often, the money allocated by zip code wasn’t enough to do anything substantial. Under the new structure, Ensley said the county would be looking out for the entire county, funding projects that come through a more competitive vetting process instead of being funded simply because they’re in a particular zip code.
Commissioner Jennifer Best, who serves as the commission’s rep on the TDA, said she appreciates Pless’ efforts.
“We’re very excited,” Best said. “I never want to see us increase a tax because everyone else has it, but it could have left us at a disadvantage.”
The loss of municipal involvement won’t necessarily affect their ability to access TDA funding; projects are scored and voted on by the TDA during a rigorous grantmaking process.
