Travel Council could see TRT funding drop sharply

Carrot at end of stick is $2.5 million ‘floor’

Moab Area Travel Council Executive Director Elaine Gizler and Travel Council Chair Howard Trenholme voice support for proposed transient room tax reform during a joint meeting with the Grand County Council – provided assurances are made the council will always receive, as proposed, an annual minimum of $2.5 million in funding. Photo by Doug McMurdo

A proposed legislative bill to reduce the amount of transient room tax that must be spent to promote tourism in Grand and other Utah counties was met with mixed feelings Friday when the Grand County Council and Moab Area Travel Council met – but the two sides ultimately agreed to put up a united front when lawmakers address the legislation in the 2020 session, which begins Jan. 27.

The proposal that received tentative support Sept. 20 sets the tourism and promotion amount at 32 percent, down from 47 percent. In order to prevent a loss in revenue for tourism agencies and also allow for growth to be allocated on the 32 percent formula, the proposal calls for the establishment of a dollar-based floor that is equal to what was spent on marketing and promotions in 2018. The annual floor varies widely from county to county, but in Grand County the figure is a bit more than $2.5 million.

State Rep. Carl Albrecht, whose District 70 includes Grand, San Juan, Emery and Carbon counties, and the Utah Association of Counties proposed the changes as a compromise. Grand County is one of several counties in the state hoping to reform the TRT formula in order to mitigate the impacts of a booming tourism economy.

If the bill fails to advance, it’s probable the Grand County Council will have to boost property taxes this budget cycle, in large part due to an almost across-the-board $1 million wage and salary increase the council approved in 2018 without an identified funding source. The decision to do so was predicated on a growing need to be more competitive in the regional job market, both in terms of retention and recruitment.

“TRT reform has been discussed for years and years,” said Grand County Council Member Curtis Wells, who was looking for informal support or opposition to the proposal, noting there was finally a potential compromise on the table that was “tangible and real.”

He said the council was tasked with drafting a “statement of position” and the Sept. 20 meeting was the first held to discuss what that position would be. Both Wells and Council Chair Evan Clapper emphasized the end goal is to unify behind the proposal – an objective reportedly shared by other counties that belong to the Utah Association of Counties.

Grand County Council Chair Evan Clapper makes a point during a joint meeting with the Moab Area Travel Council held Friday, Sept. 20 to discuss a legislative proposal to reform transient room tax. Photo by Doug McMurdo

Wells said arguments in support are that the additional tourism money would help the county pay for essential services – such as EMS and law enforcement. Opponents, he said, are concerned that giving up promotional money means they will never get it back, even when the need for it arises.

“I think the proposal is as down the middle as you’ll find,” said Wells.

If approved in 2020, the county wouldn’t realize any benefit of what amounts to a 16 percent increase in TRT revenue for a few years. Grand County Clerk-Auditor Chris Baird said, based on a conservative growth estimate of 7 percent, that the county wouldn’t “fully realize” the change until 2024, due to the guarantee of at least $2.5 million per year.

“The intent of the legislature is to ensure 2018 expenditures are locked in [for the Moab Area Travel Council budget],” he said.

Travel Council Executive Director Elaine Gizler expressed frustration with what she perceives as a lack of openness regarding the issue. “I’ve been in this position for four and a half years and have not been given the opportunity to really weigh in on this plan,” she said, adding she first heard about it last week at a tourism conference in Logan Sept. 17-19 in which someone showed her an email.

Gizler said her peers at other destination marketing organizations – DMOs – were afraid to speak up for fear of losing their jobs. She thanked Wells for “being willing to listen.” Gizler and members of the Travel Council did not object to the compromise, but they did lament what has become a common refrain between the two councils: A lack of communication.

She said Albrecht and the UAC should have listened to local DMOs as well as Utah Tourism officials before drafting the proposal.

Wells said the position statement that was provided to meeting attendees has not been formally proposed, but is more of a template to follow. “We all have varying positions,” he said. “This discussion is happening in numerous counties.” Albrecht, he noted, represents four counties with an interest in TRT reform.

Gizler also said the public perception is that all the Travel Council does is advertise, but she noted that a significant amount of revenue is spent on educating tourists before they arrive and on sustainability that will enhance the visitor experience and keep them coming into the future. Tourism, she noted, is the only local economic engine.

Wells said, “What’s great is, we have something in front of us that’s tangible and real and it’s going to be a bill.” He made the statement before asking for a “rational and reasonable” discussion on the topic.

Travel Council Chair Howard Trenholme said the conversation might be occurring in other counties, but he implied not all counties are created equal when he noted that Emery County budgeted $250,000 for tourism revenue and it brought in $240,000. Grand County TRT was $5 million; an amount he said exceeds county property taxes collected.

He did not object to the proposal but he urged the county to spend the additional revenue on mitigating tourism – and to pursue a deal with federal land agencies that operate hundreds of campsites in Grand County with no income provided to local government, which provides law enforcement, search and rescue, EMS and fire services to those campsites, and the county’s landfills take their waste.

Grand County Council Member Mary McGann later advised that the council is actively working with federal agencies on charging campers for the impacts they create, but finding out just how to do that has proved difficult due to federal resistance to collect any taxes on public lands. She said a possible compromise might be to forego a transient room tax and opt instead for a mitigation fee. “That would be more palatable for them,” she said.

For Member Jaylyn Hawks, who disclosed that she has a financial interest in a B&B, the proposal doesn’t go far enough. She suggested dropping the Travel Council’s share to $1.6 million a year; a figure Gizler said would cripple the agency.

Clapper also supported a deeper slice for the county, saying he would like to see “immediate changes, but we don’t want to raise property taxes. The goal is to be a united voice and I see this as a compromise.”