State law dictates how Grand County can spend portions of the tax revenues it receives from tourism, although it’s not as clear as it could be in some county officials’ eyes.
Grand County Council member Chris Baird asked council members to consider whether the time has come to ask the legislature if it has actually taken a close look at “mature” tourism-based economies like Moab and Grand County, and then come up with better definitions of how that money can be spent.
Both the city and the county are in considerably different situations than they were when they started out as tourist destinations: When once-lightly visited outdoor attractions like Slickrock Trail and Arches National Park first appeared on the national and international radar, the goal was to draw more and more visitors to the region, so funding went to promote tourism.
Today, however, both city and county officials are increasingly feeling the tourism-related strains on infrastructure like roads, landfills and Moab’s wastewater treatment plant, or on services like law enforcement, search and rescue activities, and Emergency Medical Services (EMS). At the same time, the community is grappling with the limited availability of affordable housing, which is strained in part by the conversion of more and more residential units into overnight rentals for out-of-town visitors.
“Your needs are going to be different, and the way that you’re going to want to spend that money is going to be different,” Baird said during the council’s meeting on Tuesday, April 18. “When you first start out, you probably aren’t going to have any impacts from tourism … Thirty years later, you’re going to have a lot of impacts, and a difficult time keeping up with the growth.”
Grand County Community Development Director Zacharia Levine said he broached the subject of the code’s wording with the state auditor about two years ago; the auditor, in turn, asked him what the county attorney is willing to defend. After that conversation, he reached out to Grand County Attorney Andrew Fitzgerald to get his opinion on which expenditures could be justified to mitigate tourism-related impacts.
“Irrespective of what Andrew and you all decide in terms of working within the existing law, it does seem like this is something that the county and the city and other jurisdictions should be conversing about with the state legislature,” Levine said.
At the very least, Fitzgerald said, it would be interesting to take a look at the legislature’s intent behind the law, and see if it mentioned anything at the time about funds for affordable housing or other issues.
“There might be a whole lot of things that were discussed that never made it into the write-up or part of the intent,” Fitzgerald said.
The Transient Room Tax (TRT) – a tax on hotels and other short-term accommodations – and the Tourism, Recreation, Cultural, Convention and Airport Facilities Tax (TRCC) are two key sources of county funding: The county received nearly $3.9 million in TRT funding alone in 2015, and this year, it expects to receive $693,000 in TRCC funding.
Two-thirds of the first 3 percent of the TRT money that the county collects must go toward the establishment and promotion of recreation, tourism, film promotion and conventions. But as allowed under state law, Grand County raised the TRT above 3 percent, to the maximum level of 4.25 percent, and anything above 3 percent can be spent to mitigate impacts from tourism and recreation, among other things.
Under that formula, the Moab Area Travel Council received more than $2.06 million in 2016.
Baird said it wasn’t until the county raised its TRT rate up to 4.25 percent that it began to recover.
“It ends up taking the pressure off the (county’s) general fund,” he said.
Thanks to the tourism-related revenues, Baird said, Grand County has one of the lowest – if not the lowest – certified property tax rates in the state.
Other TRT funds have been diverted to an affordable housing line item, while the TRCC tax on car rentals and restaurant sales has helped fund operations at Star Hall and the Old Spanish Trail Arena, and to take some of the pressure off the Grand Center’s debt load of $85,000.
Baird said his constituents often ask him why the TRT funding in particular can’t be devoted to other needs in the community.
“I get a lot of questions from citizens about why we don’t use the TRT for lots of different other things that are needs in the community, and so I think it’s worth understanding that the law restricts the way that we can spend that money,” he said. “It can’t just be spent on anything.”
In fact, he said, it has to be used for specific purposes that are laid out under state law, so the council can’t just move any TRT funds it receives into the county’s general fund. However, some of those possible expenditures are not explicitly spelled out in the current code, he said.
“It’s a list of things, but in a way, it’s not very comprehensive,” Baird said. “There’s plenty of other impacts that come from tourism, obviously.”
According to Baird, solid waste disposal operations are covered under the law, but it doesn’t, for instance, say whether a county could use such funds on wastewater treatment projects that are feeling the strains of greater visitor numbers.
“And so you think, ‘Well, why would they ever do the law like that?’” he said. “It doesn’t make sense, and so it does make you scratch your head and wonder whether or not they really intended it to be an exhaustive list.”
Levine said that Moab Area Travel Council Executive Director Elaine Gizler has been “really, really” open to the idea of connecting the dots between tourism promotion and development on the one hand, and its impacts on the other.
Likewise, he said he thinks they both agree that tourism can be the “front door” to other forms of economic development – an opinion that Gizler shared, adding that her office can help showcase the community’s selling points.
“I want (economic) diversity in our area,” Gizler said. “… Why can’t we be a little Silicon Valley here in our area?”
Baird seeks look into allocation toward tourism impacts
I get a lot of questions from citizens about why we don’t use the TRT for lots of different other things that are needs in the community, and so I think it’s worth understanding that the law restricts the way that we can spend that money … It can’t just be spent on anything.