Touristtax Collections Racing Past Pre911 Levels
Written by Susan Stabley on June 24, 2004
By Susan Stabley
Tourist-tax revenues are expected to grow above pre-9/11 levels and could create a pool of funds to cover cost overruns at the Miami Performing Arts Center and construction of a baseball stadium, according to the Miami-Dade County tax collector.
Tax collections this year have "been extremely good," said Ian Yorty. "We not only have exceeded 2001 but have had our best month ever for some of them."
All five Miami-Dade County tourist taxes have had double-digit growth at least once in the past few months from the previous year, he said. "We have seen a comeback from pre-9/11."
The county considers three of the taxes – the Convention Development Tax, Professional Sports Franchise Facilities Tax and Tourist Development Tax – as "bed taxes" because they are a combined 6% charge tacked onto hotel, motel and other temporary overnight lodgings. A tourist-development surtax and a homeless and spouse-abuse tax are levied on food and beverages at certain venues.
Collections from the three taxes from October to May have totaled $46.6 million. Total collections in 2001 were $62.7 million, according to the tax collector’s office. Collections dropped in 2002 and 2003 to $54.5 million and $58 million, respectively.
"Tourism is our No. 1 industry," said Greater Miami Convention & Visitors Bureau President and CEO William Talbert III. "We found out how fragile it was after 9/11."
This year, the county could end up over budget in tax collections. "It’s a good problem to have," Mr. Yorty said. "We’re still very cautious."
Stuart Blumberg, president and CEO of the Greater Miami Hotel & the Beaches Hotel
Association and a member of the Performing Arts Center Trust, told Miami-Dade County commissioners in May that projections for Convention Development Tax funds were showing no slowdown. He said revenue should continue growing at least 3.9% annually for the next four to five years.
"The only true number is collections," said Mr. Blumberg. "The true barometer is the bed taxes that come from occupied rooms. No one is going to the bank based on projections."
Collections from the county’s 3% Convention Development Tax – which fell more than 17% in the year following the terrorist attacks of Sept. 11, 2001 – have been higher in the past three months than they were in the same months in 2001. Collections in March were 8.8% higher than in March 2001. April collections were 11% higher than those in April 2001, and May showed a 9.9% increase from May 2001. Collections in April and May were nearly 20% over budget.
Revenues from the Convention Development Tax, introduced in 1983, are used to fund tourist-related facilities such as the Miami Beach Convention Center and American Airlines Arena as well as museums, theaters, auditoriums and cultural centers. The money is collected countywide except in Surfside and Bal Harbour. One-third of the revenues go to Miami Arena, and the rest is split among other facilities.
The county plans to use revenues from the Professional Sports Franchise Facilities Tax and the Tourist Development Tax with Convention Development Tax revenues to help build a $325 million, 38,000-seat retractable-roof baseball stadium for the Florida Marlins along Southwest 17th Avenue next to the Orange Bowl.
In an agreement with the City of Miami and the Marlins, the county would fund $59 million from the Convention Development Tax fund. Another $23 million from the fund currently earmarked to pay off debt on Miami Arena would go to the new stadium if the city can sell the arena in an auction scheduled for August.
Another $38 million for the stadium would come from the 1% Professional Sports Franchise Facilities Tax, which has shown a rebound in the last three months reported. February collections were 7.6% less than in February 2001 but 5.7% more than budgeted. In March, collections were 0.9% higher than in 2001. In April, they were 4.8% higher and in May 3.2% higher. Collections in each of the last three months reported were at least 10% over budget.
The facilities tax, started in 1990 and collected countywide expect in Surfside, Bal Harbour and Miami Beach, is used for debt service on county bonds for sports facilities such as Miami-Homestead Motor Speedway, Crandon Golf Course, Homestead Baseball Stadium and Country Club of Miami as well as the Orange Bowl and Miami Arena and the purchase of land for American Airlines Arena.
The city would contribute $28 million to a new stadium from its share of the 2% Tourist Development Tax, also used by the Greater Miami Chamber of Commerce for operations and promotions, the county’s Department of Cultural Affairs and the Orange Bowl stadium and James L. Knight Center.
The Tourist Development Tax – which fell 16.1% in the year after 9/11 – has risen in four of the past eight months from 2001. The tax, started in 1978, is collected countywide expect in Surfside, Bal Harbour and Miami Beach. The majority of revenues, 60%, go to the visitors bureau with the rest split evenly between the county and city.
Growth for the 2% Tourist Development Surtax has been the most dramatic. April collections were 46.4% over 2001 levels. Collections in December, March and May were at least 20% more than in 2001. But collections of the tax suffered the least after 9/11 – they fell only 5.7% in the year. The surtax, started in 1990, goes to the visitors bureau and the Tourist Development Council and is directly applied to tourism promotion efforts.
Collections of the Homeless and Spouse Abuse Tax increased after 9/11, though collections in 2001-02 grew only 3.9%, compared to 6.3% in the previous year. Growth spiked as high as 18.32% in December from December 2002 and 29.68% from December 2001.
The tax is imposed on all food and beverage sales by establishments other than hotels and motels that gross more than $400,000 annually with a state license to sell alcohol. Most of the revenues from the tax, 85%, go to homeless programs and services. The rest goes to domestic-violence centers and programs.
Mr. Blumberg said the solid growth of food and beverage taxes is credited to locals, who pay the tax as well as tourists.
A substantial increase in hotel inventory has contributed to the growth of the bed taxes. More than 9,000 rooms have been built since January 1999, according to Mr. Talbert – many of which serve high-end customers. Fifty hotels have been built countywide since January 1999.
"Not a single project was delayed or canceled as a result of 9/11," he said." Any (hotel) group not here wants to be here and will be here."