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Could a Hotel Tax Help Save Austin’s Creative Sector? A familiar debate returns under extreme circumstances – News

Could a Hotel Tax Help Save Austin’s Creative Sector? A familiar debate returns under extreme circumstances – News

Could “iconic” venues like Antone’s become tax-funded visitor centers? (Photo by David Brendan Hall)

As City Hall continues to rifle through its coffers looking for any and all revenue that can be used to stabilize the music venues, bars, and restaurants that face imminent closure, a familiar argument has resurfaced: Why not use some of the hotel occupancy tax revenue visitors to Austin pay on their lodging?

Regular readers may be flashing back to last fall, when the same debate gripped City Hall ahead of a vote on the failed Proposition B, which would have derailed the Council-endorsed expansion of the Austin Con­ven­tion Center. The argument put forth now by local attorneys Bill Bunch and Fred Lewis is basically the same as the pitch they made then: Council, guided by legal advice from city attorneys, simply has too narrow a view of the state statutes that regulate how HOT revenue can be used.

“The law is still the same, but the world has changed with the pandemic,” Bunch told us this week. “The viability of expanding the Convention Center is out the window, and the need for spending the money to support cultural tourism and live music is undeniable and urgent.”

Currently, Austin collects 11 cents on each dollar visitors spend on hotel stays. State statutes mandate that revenue be used in ways that specifically promote the tourism, hotel, and convention industries, including limited set-asides to support cultural arts and historic preservation. Here’s how the city currently splits up HOT revenue:

• 4.5 cents goes to the Convention Center Tax Fund, which pays debt service and operating costs of the center, which does not pay for itself through event revenue.

• 2 cents goes to the Venue Project Fund, which pays off debt approved

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