At a recent study session, Branson aldermen looked at a suggestion from city staff to consider putting the city’s tourism tax on the ballot for voters.
According to a staff report presented to the aldermen, in 1997 the city decided to authorize a Tourism Tax so the city could approve the issuance of bonds to fund permitted projects (such as sewer and water improvements) and use the tourism tax to pay debt service on the bonds. In addition, 25 % of the funds are used for marketing Branson. Currently, the city has a contract with the Branson Lakes Area Chamber of Commerce for administering the marketing funds. It is not to be confused with a Tourism Community Enhancement District tax of 1 %. The TCED tax covers a wider area and generates several times the funds for area tourism marketing.
Once the bonds are paid, the city’s tourism sales tax will be terminated and the collected funds are used for authorized projects until the funds are gone.
The bonds currently held by the city of Branson are expected to be repaid in January 2022, which, as of now, would be the end of the Tourism Tax.
“Right now we currently have a Tourism Tax as you all are aware, 4% on amusements, attractions, hotels; 0.5% on food,” said city of Branson Finance Director Jamie Rouch. “How the bonding capacity in the tourism tax relates together, I believe in ‘97 the second option was chosen, and what that basically says is that once the debt that is against that Tourism Tax is paid off, then the tourism tax goes away. So, that’s where we’re at right now.
“On Jan. 1, 2022 the last debt option that we have currently against the Tourism Tax will be paid off. So, we have to make a decision at this point in time, which option do we want to choose and do you want to put this on the ballot for voters?”
The other option Rouch is referring to would not require a sunset date for the tax and, if chosen, would create a tourism tax without bonds.
According to the report, because the financing obligations do not have a formal pledge of the tax, it would be subject to payment from the amounts appropriated on an annual basis. There would be no debt limitations for financing obligations other than for the available funds to make payment on the debt service.
Under the second ballot option recommended by city staff and is currently being used, in order to continue collecting tourism tax after the bonds are paid for, voters would have to vote in favor to continue the Tourism Tax.
According to the report, the city is currently authorized to impose a tourism tax not to exceed 4% on rooms, accommodations, amusement and admissions. As well as a tax of 0.5% on food and drinks sold at restaurant establishments.
If the aldermen one day decide to put the tourism tax on the ballot for voters and voters do not pass it, then the Tourism Tax will no longer be collected, the city will be unable to issue bonds to fund infrastructure projects, and all projects will be put on hold indefinitely.
“One of the things I want to note for you is, if this doesn’t pass, our Tourism Tax will go away, which means marketing and infrastructure abilities will go away,” said Rouch. “So, just in my world and the financial world it is extremely important that we make sure we choose the right option and we do what’s best in terms of the Tourism Tax for our city.”
According to the report, without the Tourism Tax and issuance of bonds, the city of Branson will not have the resources needed to complete projects.
The tourism tax is a restricted-use tax, meaning that 75% of tax receipts can be used for major city infrastructure; including streets, sidewalks and water/sewer systems. The remaining 25% must be used for the marketing and tourism promotion of the city of Branson.
The report states that the city’s audited financial statements show that in fiscal year 2018, the Tourism Tax brought in a total of $12,364,279, which was adjusted for the TIF debt.
This item was just a presentation and no official decision was made on this topic.
Visit the ‘Agenda Center’ at bransonmo.gov for the complete staff report.