County adjusts tourist tax allocations

At Tuesday’s County Commission meeting, representatives from tourism-related businesses appeared before the board, urging members not to reduce the funding set aside for promoting Sarasota as a destination.

The commission, however, voted unanimously to adopt an ordinance reallocating the distribution of tourist development tax revenues. The changes, recommended by staff, will allow the county to increase funding for capital projects by decreasing the proportion of tourist tax funds dedicated to promotion.

The changes are specifically intended to accommodate the funding of projects at Ed Smith Stadium. The county anticipates it will need to pay for $16.5 million in improvements at the baseball stadium during the next 10 years as part of an agreement with the Baltimore Orioles.

The county collects a 5% tax on tourist lodging, defined as properties rented or leased for less than six months. Previously, the county dedicated 30% of tourist tax revenue to promotions and 16% to sports stadiums. After adopting the ordinance, the county will dedicate between 25% and 30% to promotion, allowing 16% to 21% to be spent on stadiums.

According to county projections, staff anticipates it will only need to reduce the promotional allocations twice in the next decade. In fiscal year 2020, staff estimated it would need to divert $945,252 from promotions to stadium expenditures — a 4.1% decrease in promotional resources. In 2022, staff estimates it will use $812,710 on stadium expenses rather than promotions, a 3.2% change.

Those figures were calculated assuming a 5% annual increase in tourist development tax funds. The necessary spending changes could increase or decrease depending on the actual tourist tax returns.

Representatives for Visit Sarasota, the tourism agency that receives and spends the funds allocated for promotion, advocated against any reduction in marketing resources. Visit Sarasota board members spoke at today’s meeting about the importance of promoting Sarasota as a tourist destination, arguing an aggressive marketing strategy was necessary to bring visitors to the region.

“Just because you build a hotel doesn’t mean people are going to come,” said Jeff Mayers, board member and general manager of The Resort at Longboat Key Club. “It doesn’t work that way.”

Other individuals associated with tourism-related businesses asked the county not to divert resources from promotion given the effects red tide has recently had on the industry. The commission reminded those speakers that any changes to the promotion budget weren’t scheduled to take place until fiscal year 2020, but the timing remained a sensitive subject for several in attendance.

“I know it’s in the future, but unfortunately, I think red tide is, too,” said Elizabeth Turk, owner of the wedding officiating company RomanticVows.com.

The county commission said it had to consider more than the wishes of the tourism industry in making its decision. The board said it had an obligation to make the improvements at Ed Smith Stadium, and it believed a reduction in the promotional budget was the best way to address it.

“We have to represent the entire county, all 400,000 people, not just hotels,” Commissioner Nancy Detert said.

Multiple board members questioned the significance of the proposed reductions in promotional funding. Commissioners Mike Moran and Charles Hines pointed out that, because Visit Sarasota receives a percentage of tourist tax collections, the agency’s promotional budget has significantly grown over the past 15 years.

Hines and Commissioner Paul Caragiulo suggested Visit Sarasota’s promotional efforts alone weren’t solely responsible for drawing tourists to the region.

“I can’t imagine someone who owns a hospitality business isn’t doing their own marketing,” Caragiulo said.

Visit Sarasota chairwoman Virginia Haley was not in attendance at today’s meeting. In previous budgetary discussions with the county, she has pushed back against the suggestion Sarasota is an established destination that does not need an active promotional campaign.

After adopting the changes to tourist tax allocations, the County Commission also voted 4-1 to direct staff to research strategies for promoting local businesses during emergency events such as red tide. The board instructed staff to return with a report, including funding options, within 90 days.

Although the commission was unanimous in its support of the proposed changes, tourism business representatives at today’s meeting were concerned about the effect of the board’s vote. Visit Sarasota board member Drayton Saunders expressed fear the decision would ultimately lead to additional reductions in the funds allocated for tourism-related promotions.

“Future commissions change,” Saunders said. “What doesn’t change is the precedents commissions set, and I think you are setting a very dangerous precedent down the road.”