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Increased lodging tax could fund renovation of Columbia Regional Airport

Saturday, September 1, 2012 | 6:00 a.m. CDT; updated 8:06 p.m. CDT, Saturday, September 1, 2012

COLUMBIA — The city with voter approval can legally raise the hotel tax and impose a daily fee on occupied hotel rooms to pay for a new terminal at Columbia Regional Airport, according to a report from City Manager Mike Matthes. 

If the 3 percent tax increase is implemented, hotels and motels would have to pay the city a 7 percent tax on their gross receipts from guests' rental payments, the report said.

City Attorney Fred Boeckmann wrote the report, which Matthes will issue the Columbia City Council on Sept. 4.

Mayor Bob McDavid and several city officials and business leaders have called for a new terminal to accommodate the extra passengers the airport will receive when flights between Columbia and Orlando International Airport begin Nov. 20.

McDavid requested the report at the council's July 2 meeting, when he learned that the Missouri House of Representatives failed to pass a bill that would have authorized the City of Columbia to increase the hotel tax by 3 percent.

The report cites a 1999 state statute that authorizes charter cities to impose a hotel tax of up to 7 percent to fund the "promotion, operation and development of tourism."

The city could also legally levy a fee on each occupied hotel room, the report says. Kansas City has such a fee, charging hotels and motels $1.50 per occupied room.

The Columbia Hospitality Association, which represents 22 Columbia hotels, motels, and bed & breakfasts, opposes the tax increase.

"Increasing the lodging tax from 4 to 7 percent should be avoided at all costs because of economic repercussions to the city," said Heather Hargrove, a member and former president of the association. "It could lessen our ability to attract visitors."

A press release issued by the association last week argues that Columbia's low lodging taxes have helped it attract conferences and events such as Roots 'N Blues 'N BBQ and the True/False Film Fest.

Third Ward Councilman Gary Kespohl supports raising the hotel tax to pay for the terminal.

"We haven't had an increase in a number of years," Kespohl said. He also pointed out that the tax will mostly be paid by nonresidents.

Kespohl noted that Jefferson City levies a 7 percent hotel tax. Voters approved the tax in February 2011.

The city would probably issue bonds to pay for the terminal, Kespohl said. The hotel tax would pay off the bonds over many years.

City officials have also considered paying for a new terminal by pursuing state and federal grants.

In January, architectural firm Reynolds, Smith & Hills estimated the cost of a terminal renovation at $17.1 million. On Aug. 19, the City Council approved the appropriation of $50,000 to start designing a new terminal.

According to the report, the city established the hotel tax in 1979, setting it at 2 percent. Columbia voters approved a 2 percent increase to the tax in 1999, and the tax has remained at 4 percent since.

At the Sept. 4 meeting, the City Council will also vote on a resolution to set a public hearing for consideration of several construction projects that would allow the airport to accommodate more passengers. The projects would include the construction of a larger passenger waiting area, the relocation of the baggage claim area and a new parking lot on the west side of Airport Drive.

The resolution estimates that the improvements would cost $166,835. At its Aug. 20 meeting, the City Council appropriated that amount to airport construction projects from money the Federal Emergency Management Agency gave the city in compensation for the costs of the 2011 snowstorm.

The mayor has said that the new addition — a double-wide trailer — is only a temporary measure to ease the airport's expansion before a new terminal is built.

Supervising editor is Scott Swafford.


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Comments

Kip Hill September 2, 2012 | 1:34 p.m.

I'm curious, and perhaps the reporter or another reader can shed some light on this topic, as to why FEMA money can so easily be appropriated to another purpose. Don't get me wrong, I'm thrilled the city has appropriated the funds necessary to move forward with planned airport improvements, but it's also incredibly interesting that hundreds of thousands of dollars earmarked (maybe that's the wrong word) for snow clean-up can be moved across the ledger to capital projects.

Does anyone know the legal ramifications of this decision? I'm just curious how much of that $6.1 billion (http://blog.fema.gov/2012/02/fiscal-year...) allotted the department in fiscal 2013 is actually going toward disaster relief. Just a question from a former/fellow Missourian public lifer.

Kip Hill

(Report Comment)
Richard Webner September 2, 2012 | 6:07 p.m.

Kip,

Thanks for the comment. I believe that the FEMA money was compensation for what the city spent on the 2011 snowstorm. Basically, it's returning the city's coffers to the level they would be at if the storm had never happened. So, it's not like the city is spending money that was intended for disaster relief.

You raise an interesting point, though - can the city spend the FEMA money on whatever it wants? Are the rules for the money different from that of the city's other money? These are questions I'd definitely like to look at.

Richard Webner
Public Life Reporter
Columbia Missourian

(Report Comment)
Kip Hill September 4, 2012 | 10:01 a.m.

Richard,

Thanks for that information. That method certainly makes sense, though it calls into question whether that money would have been spent on airport upgrades to begin with. Incentives change drastically from month-to-month for a city (so I would assume), and it's very interesting that FEMA would grant money to cities with no strings attached (if, indeed, that's what they do).

I look forward to any information you can find on this topic.

Kip Hill

(Report Comment)

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