https://www.citizen-times.com/story/...ax/1940923002/
Dillon Davis, Asheville Citizen Times Published 12:48 p.m. ET Nov. 9, 2018
Asheville mayor wants voters to approve new sales, food and beverage taxes
ASHEVILLE — Asheville Mayor Esther Manheimer proposed Friday plans to ask voters to consider new forms of taxation that would grow city revenue and potentially lessen the burden of tourism on residents.
In a meeting with the Council of Independent Business Owners, Manheimer proposed a quarter-cent sales tax raise to enhance the city's transit service, which she argues would make it "much more usable every day for folks trying to get to work." The tax would raise $13 million annually to boost funding for the transit system as well as local infrastructure needs such as roads and sidewalks.
She also discussed the potential for a new food and beverage tax that would raise between $8 million and $9 million annually. Manheimer suggested the funds could be restricted for certain expenditures — downtown maintenance, for example — opening up opportunities for the city to divert some of its revenue to address other concerns levied by residents.
Both proposals require referendums Manheimer says could be on the ballot in 2020.
"We’re looking for revenue streams that better tax visitors instead of residents," she said. "It should be a popular idea. As you see, there’s an imbalance with residents paying a disproportionate amount."
City Council will take a "deep dive" into the proposals during a Nov. 13 work session, the mayor said.
Council members have faced growing concerns this year over development efforts in the city, which some see as coming at the expense of paying for needed expenditures such as road paving and infrastructure. Manheimer said in October she's "toyed with" the idea of a temporary hotel construction ban in the city, but ultimately noted the council needs to examine the ways tourism impacts the community.
Last month, hoteliers Monark Patel and Pratik Bhakta pulled a proposal for a 7-story, 103-room hotel on Biltmore Avenue after three members of the council including Manheimer indicated they would not vote for it, citing the need for the city to address its lack of "revenue diversity."
In North Carolina, state statute allows counties the option to implement a quarter-cent sales tax. It must be approved by voters in a referendum before it can be adopted in any county. This year, more than two dozen counties in the state attempted to implement a quarter-cent sales tax — and about 65 percent of those proposals were rejected by voters.
Last sales tax hike was in 2011
Buncombe County voters last passed a quarter-cent sales tax referendum in 2011, according to the North Carolina Association of County Commissioners. It was intended to pay for construction at Asheville-Buncombe Technical Community College — but a large portion of the revenue was used to balance the county's own budget.
Manheimer said legislation restricts how the new proposed tax could be spent. It is not discretionary and it can't be used to displace current spending on transit, she said.
With the food and beverage tax, Manheimer said she's effectively seen it done two ways in the state: either the legislature puts it in place or it authorizes a locality to hold a vote.
Her proposal Friday called for the latter. She said the measure requires "a lot" of community engagement, especially with local restaurants to determine how the funds should be spent.
"This would take quite a bit of conversation and collaboration to get agreement on how to do this," she said.
The other proposal Manheimer offered is working with the Buncombe County Tourism Development Authority to direct its percentage of funding annually granted to tourism capital projects to "multi-year, long-term efforts." The TDA voted last week to pause its Tourism Product Development Fund — made up of 25 percent of the $23 million generated by the county's hotel occupancy tax — in 2019.
Explore Asheville President Stephanie Brown said the fund has the potential to "enhance the quality of projects and provide a strategic look at how money can be used over a long period of time."
"We committed to a vision 15 years ago that Asheville and Buncombe County will retain its unique, authentic and environmental charm while welcoming visitors," Brown told the TDA on Oct. 31.
Manheimer said the better course of action is to become more strategic with the TPDF "rather than one off on this and one off on that."
"We could have some way to designate those funds so we knew year-over-year how they’re going to be used," she said.
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