Bed Tax Increase Set In Motion

by December 4, 2008 • 9 comments

Wednesday’s Revenue Enhancement Committee decided to recommend an increase in the bed tax collection from 3% to 5%.  The committee decided based on a fairly detailed analysis on how to spend the money based on the needs of our area as a tourist destination.

The recommendation now will go before the Tourist Development Council (TDC) next Tuesday.  If they approve the recommendation, it will have to be approved by the Bay County Commission before the tax can be collected.

Now, I can already see where the comments will go on this one.  Many argue we don’t need the increase or wonder why we should increase taxes during dire economic times.  Some may argue that increases such as these are partial to the larger resorts/attractions or that the TDC doesn’t know how to spend the money they have, why should we give them more.

But, the reality is that we are behind the times here and our competition passed us a long time ago.  We’ve been behind for a while, and it is time to start catching up.  The TDC and local authorities may not want to consider some things our competition is doing successfully **cough- lifeguards -cough**, but at least they are onto something here.

We are the lowest percentage wise bed tax collector in Northwest Florida, and other areas in South Florida that are competing for our sports marketing contracts are at 3 and 4 cents more than we are.  I’ve said it before, and I’ll say it again, if we want to compete, we need more money.

One of the largest tourism segments at risk here are the sports teams and their families that come here in droves each and every year.  At immediate risk are 2 sporting events currently being wooed by our competition.  They account for nearly one third of all our sports tourism traffic which equals an estimated $10 million in revenue; roughly 60% of that number goes to room rates.

Right now, sports teams that come here for competitions have to travel all over Bay County to play and have expressed their desire on many occasions to play in one location.  The beach is nice, but our facilities are in need of improvement.  If we don’t improve, we’ll lose the business.

Capital improvements discussed yesterday as they pertain to sports marketing included:

  • Enhancements to Frank Brown Park – Add two additional softball/youth baseball pinwheels which would total 5 large fields and 4 small fields; renovate existing south pinwheel; develop one of the new fields as a marquee field with expanded seating and dugouts; add additional parking; add additional restroom facilities.  This would total an estimated $4.9 million
  • Create a Sports Village for Baseball – Develop additional baseball pinwheels, nine fields total; develop one of the new fields as a marquee field; and new parking facilities and interior roads.  It wasn’t clear whether additional land will be required for this.  The total estimated cost (not including any land acquisition) is $6.6 million.
  • Create a Sports Village for Soccer -Develop 10 rectangular fields; upgrade four existing fields to artificial turf; develop one field as marquee field; and new concession and restroom facilities.  Total estimated cost of $4.4 million
  • Create a Sports Village for Equestrian Grounds -Develop a horse ring; build 200×300 foot open air pavilion with dirt floor; grade sod and irrigate area for paddocks and horse barns.  Estimated total is $2.4 million.
  • Indoor Field House – Develop 100,000 foot indoor field house that could be used to expand its sports product offerings to include mat and court sports.  It was recommended that $32,000 be used for a feasibility study to guide the decision making process as to the specific scope of this project and which direction we should go.  Estimated cost of $16 million.

The total costs of all sports-related improvements add up to $34.3 million.

Other improvements suggested include enhancing Aaron Bessant Park to have a permanant facility for concerts and theatrical performances.  The improvements would include the development of a 5,000 seat amphitheatre/concert bowl by building an extended grass-covered berm and developing flat open fields out of the raw acreage that is currently not being utilized at the park.  The total cost of improvement would be around $4 million.

As part of the marketing/awareness section, it was suggested:

  • Revise the schedule and increase the frequency of beach grooming from 26 times a year to 38 times per year, ramping up the frequency during the peak seasons.
  • Add 100 extra trash refuse containers along the beach during spring break at public beaches
  • Add 50 refuse containers specific to recycling of plastic bottles and aluminum cans during spring break at public beaches.
  • Develop :30 and :60 PSA’s to run on local networks on beach safety.
  • Purchase additional billboards to promote flag warning system.
  • Partner with Boomer Aviation to fly red flags behind the plane on red flag days during peak seasons.

Currently each penny garners an estimated $2.2 million each year with a total $6.6 million being collected per year right now.  An increase of 2 pennies will result in an annual increase of around $4.4 million, which would result in an estimated total collected of $11 million per year.  Of course, this number goes up if occupancy rates go up.

The current bed tax usage is as follows:

  • 0.5% – TDC Marketing/Awareness/Operations
    • Beautification Program
    • Keep the Beach Clean Campaign
  • 1.5% – CVB Destination Marketing
  • 1.0% – TDC Beach Nourishment

The recommended usage if raised to 5%:

  • 0.75% – TDC Marketing/Awareness/Operations
    • Enhanced Beautification Program
    • Enhanced Keep the Beach Clean
    • Beach Safety Campaign
  • 1.25% – Capital Projects to enhance Sports and Special Event Marketing
    • Development of amphitheater and special event ground at Aaron Bessant Park
    • Expansion of softball/baseball fields at Frank Brown Park
    • Development of Sports Village Complex
    • Assist in funding on-going maintenance of new athletic fieldd
  • 1.0% – TDC Beach Nourishment
  • 2.0% – CVB Destination Marketing

Click here for a copy of Dan Rowe’s presentation

Print Story

Related Stories

Additional TDC Meetings Stories

More Ways to Connect with Us

Leave a Comment

{

7 Comments

}

1 William White December 5, 2008 at 7:20 am

Other suggestions are to clean up the beaches, streets and byways of Panama City Beach and to enact and enforce some strigent standards about littering , and the closed businesses and houses along the the main streets, i. e. Front Beach Road and Thomas Drive areas. I love the area and have been visiting for years. I am now a property owner and soon plan to be a resident. But the public areas are just plain junky. With the new airport coming and a desire to be a world class resort, the area is going to have to look like one. Projecting that visual impression is the first step and a relatively inexpense one to becoming that world class resort. Who wants to travel along trashy roadways to go to an up-to-date athletic or equistrian center. More trash containers on the beaches is a start, but if people don’t use them there has to be a back up plan to correct the problem. It is all about attitude, if some people are in a trashy area they tend to have the mindset that it doesn’t matter and they contribute to the problem. As for the tax increases most people do not mind paing a little extra to go first class.

Reply

2 Butch Metcalf December 9, 2008 at 9:50 am

Maybe a good idea? But they need to get outside funding to pay for it. Then pay it back with the increase in visitors!
But then that might make them accountable…

If you spend more money to get more visitors then they collect more taxes on the increased traffic at the current rate. Currently if the money spent don’t work then the owners take the hit again. If they need more income they need to enforce the current tax rates for the folks that rent their units on national web sites them selves and pay no taxes. The local property management companies collect and pay taxes and are finding it harder to compete with the owners that do not. We hear it time and time again from the renters that they can get a better deal from the owner because that do not charge the 10% taxes collected by the property managers and owners that do pay their taxes.

HELLO has any one noticed the economy? Raising the bed tax would be another devistating blow to our local economy. Here is why. Even though they say the bed tax is paid by the visitor, the reality is that the market for a room is the market. Any increase will not be paid by the visitor it will only reduce the cash flow to the owner. So don’t buy into that visitor pay’s it stuff.
Less cash flow to the owner equals more foreclosures. In a time where most condo owners are feeding their investment by $ thousands per year already while seeing values continue to fall, more expense is the last thing needed.
Every time you cut the cash flow of a property the value drops. Every time the value drops more go into foreclosure and that causes the value to drop even more. How many empty condo buildings do they want to see on the beach?

If they want to help the market they need to borrow the money some where and pay it back if the visitor count increases. That way they are not putting it on the backs of the owners if the new spending produces little results.

If the REC/TDC borrows the money they will certainly be accountable for it’s use, and return on investment, for what they spend. Just raising the taxes again will take the incentive out of being sure the money is spent correctly.
Bottom line is if they need money to increase traffic. Let them borrow it, and not take it from the owners. If their plan works they will get it back in additional visitor traffic. If it does not then the REC/TDC will be responsible to foot the bill.

Reply

3 John December 9, 2008 at 10:05 am

Even as an indeepndent owner-landlord,
I can support this…

ONLY IF

we will hire more than one collector for the bed tax and step up enforcement to include the so-called “agents” who rent to students with 4 month visas.

Check the numbers:
If a major resort chain
(Mariott, Resort Collection, Edgewater, Royal American, Resort Quest, Seahaven, Sterling, – did I forget one?) –

employs 100-150 additional workers during the summer
(plus many other smaller employers, e.g CiCi’s Pizza)

we have 700 – 1050 students here in 4 mo visas

over a 6 – 8 month season,

each worker/student paying 300-400/month for thier room while here on a 4 month visa
(4 mo being less than the 6 mo so TDT is required),

then we get the following revenues for the “agents” and
the following taxes due for thier rentals to the “students”

at all the lesser numbers:
(700 students,6 mo season, 300/mo rent, 3% TDT)
Agent Revenue for rentals: $147,000,000 ($147 Million)
TDT DUE: $4,410,000 ($4.41 Million)

at all the larger numbers:
(1050 students,8 mo season, 400/mo rent, 5% TDT)
Agent Revenue for rentals: $441,000,000 ($441 Million)
TDT DUE: $22,050,000 ($22 Million)

I noted that one resort mentioned in a recent article
employs about 100 additional workers during the season.

Some employ “students” year ’round. Lots wiggle roon here, but the numbers at any level point to a need for the fullest enforcement of the TDT.

I am sure some wag will now go
and check to see if I am paying
the TDT. Yes, dude, I am.

I have my doubts about the agents, though.
They often do not seem to follow any other rules here.

Reply

4 tom December 9, 2008 at 5:31 pm

I also rent myself and pay my taxes through “Hotspot”. We also loose renters because others are charging less and may not pay their taxes.

Anyway…..the ballfields are a great idea, but the nasty sidewalks and closed stores and properties along Front Beach
Rd and Thomas Dr. keep the entire area looking like a hugh mess! What happened to all the revenue created by the property tax on all the new condos? Where is that money going? Just look at Destin, Ft. Walton, etc etc and you see why we are still not a place a lot of people want to visit. The new buildings and Pier Park are great, but thats it. Where is the county contributing to their cash cow that pays most of the bills in the county? Lets clean up Front Beach road first.

We need and deserve some of the property tax that we are paying along the beach for our own use. I can only imaging the amount of money being paid in property taxes by the “hurting” owners of beach property. We need help, not more taxes!

Reply

5 mike December 10, 2008 at 3:20 am

I guess my question would be…….. are we not throwing good money behind bad practices? I know we have new leadership in the TDC, but the TDC does not have a very good reputation as a good functioning body. I think the tax would not feel so bad to every one if there was an up to date showing for the TDC that reflects that they are now going in the right direction. I do not feel that giving money to MTV was a very good reflection that we are going in a good direction. The young people are going to come here regardless. I do believe in marketing that makes sense. How much money do we make from the horse event? Is it worth putting money into Frank Brown Park for one event?
To my knowledge we have one to two events. The Racking Horse Event and the Tennessee Walkers. Each event is what 3 days each? I can see the need to expand the sports arena. How about a larger sign for the park. One that you can read from the road instead of putting money on a once or twice a year horse event?

Reply

6 Ron December 10, 2008 at 6:38 am

And move the entrance to Frank Brown Park down to the light at Pier Park and close that “accident waiting to happen” entrance they have now. Close up the median, and keep a right turn enter, right turn exit if you must, but do something. And no, a traffic light is not the answer, you’ve got the Panama City Beach Parking Lot as it is. The TDC could have a lot of influence in safety issues involving tourists and visitors especially at “event sites.”

Reply

7 John January 6, 2009 at 1:38 pm

I goofed. I slipped a couple of zeros here.
Corrected numbers are below in this post.

Even as an indeepndent owner-landlord,
I can support this…

ONLY IF

we will hire more than one collector for the bed tax and step up enforcement to include the so-called “agents” who rent to students with 4 month visas.

Check the numbers:
If a major resort chain
(Mariott, Resort Collection, Edgewater, Royal American, Resort Quest, Seahaven, Sterling, – did I forget one?) –

employs 100-150 additional workers during the summer
(plus many other smaller employers, e.g CiCi’s Pizza)

we have 700 – 1050 students here in 4 mo visas

over a 6 – 8 month season,

each worker/student paying 300-400/month for thier room while here on a 4 month visa
(4 mo being less than the 6 mo so TDT is required),

then we get the following revenues for the “agents” and
the following taxes due for thier rentals to the “students”

at all the lesser numbers:
(700 students,6 mo season, 300/mo rent, 3% TDT)
Agent Revenue for rentals: $1,470,000 ($1.47 Million)
TDT DUE: $44,100

Note this pays for an additional enforcement official.

at all the larger numbers:
(1050 students,8 mo season, 400/mo rent, 5% TDT)
Agent Revenue for rentals: $4,410,000 ($4.41 Million)
TDT DUE: $220,500 ($220 K)

Note: Based on some numbers posted on PCB Daily, this would be one of the largest increases in TDT in the last five years….at a cost of only $35-45K for an enforcement officer.

I noted that one resort mentioned in a recent article
employs about 100 additional workers during the season.

Some employ “students” year ’round. Lots wiggle roon here, but the numbers at any level point to a need for the fullest enforcement of the TDT.

I am sure some wag will now go
and check to see if I am paying
the TDT. Yes, dude, I am.

I have my doubts about the agents, though.
They often do not seem to follow any other rules here.

Reply