The Bexar County Commissioners CourtÂ voted earlier this month to present Â San Antonio area voters with a $415 million venue tax increase measure on the May ballot.Â While it would fund lots of nice-sounding goodies, increased hotel and rental car taxes have been proven to reduce tourism.
TheÂ projects to be funded includeÂ $125 million to finish an extension of the San Antonio River, about $100 million to convert Municipal Auditorium into a performing arts center, $100 million for improvements to the AT&T Center and Freeman Coliseum, $80 million for various amateur sports facilities across the city, $4 million for the Briscoe Art Museum and $6 million for the Alameda Theatre.
The Texas Attorney General has been asked to rule on whether each spending measure should be split up or whether the County can stuff them all into one ballot proposition.
On aÂ blog thread on this issue created by the San Antonio Express-News, many Alamo city taxpayers criticize the proposal, questioning for example whether taxpayers should fit the bill for the improvements to the garage at the AT&T Center where the San Antonio Spurs play.Â Â
A common misconception is that this tax, which is borne by those who stay in hotel rooms and rent cars, does not affect local residents.Â However, a significant pecentage of cars are rented by locals when their cars are being repaired so they pay the tax too.Â
A study by Hiemstra and Ismail found a 4.4 percent delcine in the number of rooms rented as a result of a 10 percent room tax.Â Morever, it is well knownÂ that major convention planners increasingly consider these taxes in determining which cities to patronize – this is why New York City scaled back its hotel tax.
Under former Mayor Rudy Giuliani, New York City cut its hotel tax from an effective 20.6% to 14.6%, saving hotel guests more than $161 million in hotel taxes from 1995 to 2002. Proving that supply side economics work, New York City increased its revenue from the hotel tax by nearly 90%â€“from $127 million in FY94 to $239 million in FY01
Will San Antonio make the same mistake that New York City liberals once made in thinking that there is a free lunch and that you can grow your economy byÂ falling into the trap ofÂ don’t tax me, tax the man behind the tree?