Austin Mayor Supports 2 Percentage Point Tax Increase


Tom Noonan, president and CEO of Visit Austin

In a memo posted this week, Austin Mayor Steve Adler supported hiking the city's venue project tax that is levied on hotel rooms by 1 to 2 percentage points, at the highest bringing it to 4 percent and the overall tax on a hotel room to 17 percent, in order to fight homelessness in the city as well as fund the possible expansion of the Austin Convention Center. If the city's occupancy tax hits that level, it will be among the highest in the country; St. Louis currently has the highest rate, at 17.93 percent, followed by Omaha, Neb., at 17.5 percent, according to HVS, a hospitality consulting and market-research firm.

The mayor's memo said his solutions to the "downtown puzzle" would provide $4 million to $8 million to combat a rising homelessness problem, with much of the money going to support the Austin Resource Center for the Homeless. "Indications are that the Austin hotel industry would participate in providing such a funding stream to deal with the community priority of downtown homelessness if it were part of a package that also included the expansion of the convention center," he wrote.

Last August, the city created the Visitor Impact Task Force to study the impact of tourism on the city; to review current uses of hotel occupancy taxes and the impact of those activities and expenditures on tourism in the city; and to review possibilities for the expansion of the Austin Convention Center. In May, that entity concluded that the convention facility, which has 247,052 square feet of exhibit space, could be increased by about 50 percent, at a cost of about $609 million.

"The mayor's downtown-puzzle plan and the recommendations outlined by the Visitor Impact Task Force ultimately lie in the hands of the city council on whether or not to expand the Austin Convention Center by raising the hotel occupancy tax," Tom Noonan, president and CEO of Visit Austin, told M&C. "Regardless of the outcome, we will continue to work with the city council and the mayor to improve our city and promote economic growth through tourism development."