This evening City Council passed an ordinance allocating its annual payment from the Hotel/Motel Excise Tax to the Affordable Housing Trust Fund. The fund receives 8.43 percent of this Excise Tax which amounted to $976,000. The following is my testimony regarding this matter for your review:   

We are all well aware that the decrease in revenue from the Hotel/Motel Excise Tax which goes towards the Affordable Housing Trust Fund would be considerably less this year due the impact that the COVID pandemic has had on our city’s tourism and convention business. And I think it’s fair to say that nearly everyone is optimistic that our city’s tourism and convention business will rebound in the next year or two as more and more people get vaccinated, and rates of infection are reduced.

And sure the $976,000 that is going towards the Trust Fund is better than nothing, but in my opinion even the 2019 expenditure of $1.9 million in lodging excise taxes could be even more. And the solution to that lies on who is receiving a share of these taxes and how much of a share.

Currently, the trust fund receives 8.43 percent which is the lowest of the 4 entity’s that receive a portion of this tax revenue with the highest being the Convention and Visitors Bureau receiving 46.86 percemt, Cultural Services and Community Enrichment at 32.94 percent and Emergency Human Services fund at 11.77 percent.

Cultural Services which include Arts organizations have been and will continue to receive additional revenue from City Councils approval of a 5% ticket tax that was approved a year ago. By reducing their share of the hotel tax revenue by 13 percent, while receiving the additional revenue from the art tax, they will still be well ahead of revenues that they would expect to receive from the Hotel tax along with the combined art tax.

I also feel that the Convention and Visitors Bureau can afford to do some belt tightening and reducing its share of hotel tax revenues by 7 percent. This 20 percemt total reduction from these two benefactors would go towards the Housing Trust fund while increasing its tax revenues to 28.43 percent or just over $6 million annually.

And I also want to say that I will never get over the fact that this City Council approved of 70 percent of the bed taxes generated from the North Market Tower project to be used to subsidize that development. This was a misuse of this revenue and should never happen again.  

And to be clear, I am not suggesting that the proposals I have made this evening go into effect at this time, but when our local economy has recovered and above all the tourism and convention business which generates our Hotel/Motel Tax revenues.

Other ideas to increase funding for affordable housing, which there are many, for example Austin, Texas more than doubled funds for affordable housing, and private investors in that city are establishing a $500 million private-equity fund to preserve affordable rental units. Columbus could include perhaps a $250 million bond voter approved package where funds would be split into home ownership assistance, land acquisition for new affordable housing development, rental housing, repair and rehab of existing housing and rental units and down payment grants.