The House tax cut package brings back the ever-popular sales tax holidays, trims the commercial lease tax and slashes the communications services tax.
Floridians are sure to enjoy the estimated $115 million in savings brought by HB 7097, but there’s a catch: it furthers the Florida House’s war on tourism marketing.
Nestled in the fine print are extensive changes to how tourism development tax revenues may be used. Statewide, the bill would allow those dollars to be used on water quality projects ranging from septic-to-sewer conversions to algae cleanup.
The tourism industry is opposed to the change, as it would divert money from the intended purpose of the tax — developing tourism.
Proponents argue that clean water and pristine beaches will help bring in visitors as well as any marketing campaign could. Besides, the plan only adds water quality projects to the list of options, there’s no requirement.
They may be wrong, but there’s some logic there.
But there isn’t any logic behind another suite of changes targeting one county in particular: Miami-Dade.
The bill would tell the state’s most populous county how to spend every dollar it collects through the TDT, convention development tax and the food and beverage tax — a fee on hotel restaurant purchases that’s unique to Miami-Dade.
Per the bill, 20% would go to the county and 30% would go toward the uses outlined in the new “Local Option Coastal Recovery and Resiliency Tax.”
The remaining half of would be given to municipal governing boards within the county. The problem is, there aren’t any municipal tourism marketing boards, leaving the Miami brand effectively rudderless. Without a joint effort, collections certainly seep into other areas of city budgets, especially since the bill would allow the cash to be used for fire and police departments.
The mission creep would effectively kill the Greater Miami Convention and Visitors Bureau, which brings in loads of visitors on a relatively small budget of $32 million — about 11% of Miami-Dade tourism tax collections, or 2% if the sales tax they remit is factored in.
“State House Bill 7097 would take away funds critical to supporting tourism in Greater Miami, which generates $18 billion in annual economic impact and supports 147,000 jobs. The Greater Miami Convention and Visitors Bureau ensures Miami continues to be a top destination for visitors across the globe and helps the tourism industry manage through crises — from hurricanes to oil spills.” said GMCVB President and CEO William Talbert.
“Simply put, elimination of these funds means the inevitable loss of valuable market share in the highly competitive international travel world, removal of critical support for tourism-related businesses and the jobs they support, and damage to economic impact.”
All told, the changes would commandeer more than $140 million a year in tourism taxes, eviscerating Miami-Dade’s tourism marketing operation and stripping the GMCVB of more than $25 million in annual funding.
This funding benefits the entire county. It’s meant to market the whole of Miami-Dade as a destination. It’s not meant directly fund local government operations or local tourism boards.
Quite the opposite, in fact.
When the option taxes were approved — at both the state and local levels — the goal was to keep the dozens of municipalities from stepping on each other’s toes.
It’s marketing 101. Competing with a neighbor to attract visitors from across the world simply doesn’t make sense if those resources can be pooled together to reach an exponentially larger audience.
No offense to any of the county’s three dozen municipalities, but Hialeah and Coral Gables aren’t global brands. Miami is, and every city in county benefits from its continued marketing.
The Legislature understood that decades ago, but the House apparently wants to relearn it the hard way.
Like the chamber’s stance on VISIT FLORIDA, this experiment would be catastrophic for tourism in the best of times, but it is doubly so now.
It’s been less than a week since the first presumptively positive cases of COVID-19 showed up in the state, and there have already been tens of millions of dollars in cancellations at Florida hotels and attractions.
At a moment when Miami-Dade — and the state at large — needs to push back against negative media attention, the House is seeking to disarm them.
Tourism marketing agencies are part of an effective emergency response effort. While cities and counties are dealing with the nuts and bolts issues, they work to keep the visitors coming so business can recover and tax dollars can flow. On the flip side, defunding marketing means fewer visitors, struggling businesses and cash-strapped city halls.
“The importance of tourism marketing to the community is unquestionable — tourists pay approximately 38% of all sales taxes collected in Miami-Dade and pay about $515 per household in taxes, helping alleviate residents’ tax burden,” said Wendy Kallergis, President and CEO of the Greater Miami and the Beaches Hotel Association.
“What’s more, Miami-Dade’s hotels employ more than 120,000 people. This bill jeopardizes our top industry, the significant tax revenue it generates at the local and state levels, and hundreds of thousands of jobs.”
Florida economy is growing more diverse, but tourism is and will remain its backbone. Lawmakers should work to ensure it remains strong, especially in times of need. If they don’t, there won’t be any more tax cut packages.