Bub questions how city spends its share of room tax
A call to account for how the city spends its share of the room tax dollars raised some heat in what was otherwise a routine review of the city enterprise fund budgets.
At Monday night’s budget review session, Alderman Mike Bub called on the city to show how it spends the 30 percent of the room tax money it keeps. State law allows municipalities to keep up to 30 percent of the special sales tax on hotel and motel rooms for whatever purpose they see fit. The remainder of the money is allocated through an independent room tax commission for tourism promotion and events.
Prior to 2017, the city council had complete control over how all the money was spent and put 100 percent of it toward tourism and community events. City coordinator John Fales noted that there were items such as the purchase of new Christmas decorations for the light poles and upgrades to the lighting at the softball fields that were budgeted for out of the fund.
Since the switch to an independent commission, the city kept a percentage going into the general fund as undesignated revenue in 2017 it was 23 percent and in 2018 it is 30 percent.
“I believe this tax was created to be used for tourism and not just go into the city budget,” Bub said. He called for greater accountability to ensure the city was spending its portion of the room tax money to promote the city rather than just putting it in the same pot with property taxes.
Aldermen Greg Knight disagreed. “I think we should keep the city away from the committee,” he said, noting he did not think it was appropriate to tie the city’s hands on how its portion was spent.
Mayor Mike Wellner questioned if Bub was calling for the city to give all the money to the commission. “We have lost all control,” Wellner said.
Bub replied that he didn’t want to give all the money to the committee to spend, but wanted the city’s portion to be designated. “If the city wants to take $14,000 off the top and designate it, I am fine with that,” Bub said.
Knight opposed the idea of itemizing how the money will be spent. Bub said he opposed using the money for things like asphalt and curb and gutter.
“We never needed the money before in our accounts why do we need it now?” Bub asked.
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