Moderated by Rick Badie
An advocacy group has said people should be allowed to vote on the plan to build a new home for the Atlanta Falcons using some public funding. But with a referendum looking increasingly unlikely, an official with that group questions the way city officials and leaders have handled the issue. Meanwhile, a hotel executive gives the history and structure of the hotel-motel tax in question.
Editor’s Note: The print edition of Perry’s story had an incorrect figure for Arthur Blank’s contribution to infrastructure costs for the new stadium. It is $70 million, not $50 million.
Let voters have say on stadium
By William Perry
As the head of a nonprofit government watchdog group, I hear comments about people’s cynicism toward elected officials all the time. No doubt trust in government is at an all-time low. I try to convince people to find reason to keep believing, but it is truly like pushing a boulder up a hill.
Look no further than Monday approval by the Atlanta City Council of the new Falcons stadium as a prime example of why people feel this way. Common Cause Georgia had called for a public referendum on the proposed billion-dollar stadium. We wanted Atlantans to decide if public funds should help build it. Be it a binding or an advisory vote, we believed a referendum was necessary for people to find out exactly how much public money would go toward the project.
You have heard time and again from Mayor Kasim Reed, Gov. Nathan Deal and others: The public will fund $200 million of the construction, while Arthur Blank and the Falcons pay $800 million. Here’s the math they do not want you to do:
* $882 million in hotel-motel tax revenue through 2050, all of which under current law must go to the stadium (but remember, laws can be changed).
* $50 million from the state in sales tax credits for construction.
* $24 million in free land from the state on which to build the stadium.
* $15 million from Invest Atlanta — city taxpayer dollars — for unspecified “community development.”
That alone is $971 million dollars of public funding. I should note – City of Atlanta CFO Jim Beard came up with a lesser number on hotel/motel tax revenue projections, but no one has stated that the Georgia World Congress Center’s numbers, which I stated above, are wrong. No matter the amount, either is well over the $200 million investment that has been constantly thrown around. Either amount would significantly reduce the $922 million backlog of infrastructure projects Reed often talks about. Is a stadium more important than crumbling infrastructure?
The $971 million does not include one more big thing: infrastructure costs. Blank has said he will pick up the tab for the first $70 million. It’s public money after that. How much will it be? No one can get a definitive estimate. For example, it was revealed last week that the Martin Luther King Jr. Drive bridge will have to be moved to build on the preferred site.
Cobb County residents voted Tuesday to extend their education SPLOST. Last summer, the metro region got to vote on T-SPLOST, the transportation initiative. And Atlantans voted last year to extend the penny sales tax on sewer repairs.
But when it comes to a referendum on the $882 million in Atlanta hotel-motel taxes to be used on this stadium deal, some say, “Unless we’re raising taxes, the people don’t get to vote on it.” Stated more directly: “Once we’ve got our hands on the money, it’s none of your business how we spend it.”
Referendums were held on the public money for billion-dollar stadiums for the San Francisco and Dallas teams. Why not let Atlantans have the same chance to vote on our billion-dollar — or more — investment? Trust in Atlanta government likely took another huge dip Monday night. The boulder I push got a lot heavier.
William Perry is executive director of Common Cause Georgia.
Hotel taxes reduces our burden
By Ron Fennel
More than 40 years ago, the Atlanta hotel industry asked the state of Georgia for permission to tax itself to enhance opportunities for the city’s hospitality and tourism business. A special tax on hotel stays would provide a consistent revenue stream to support proper promotion of Atlanta as a meetings and tourist destination.
This resulted in a remarkable agreement between the city and the Atlanta Convention & Visitors Bureau as the original recipient of the funds. The bureau has long been the city’s designated marketing organization, focused solely on generating conventions, meetings and tourist economic activities.
Later, the formula was adjusted to allow a portion of the tax to be allocated to the Georgia World Congress Center Authority for development of a world-class complex. Facilities on the authority’s campus are considered a “tourism product” since they are heavily used by groups and conventions. They bring significant numbers of people to the city, almost all of whom stay in our hotels and pay the local hotel tax. That tax generates consistent tourism dollars for the city and state.
In 1990, part of the tax was allocated to float bonds to construct the Georgia Dome, another obvious tourism generator that has also been used heavily by the convention and events industry. Once these bonds are paid, the city must renew the 38-year-old tax for it to continue. By renewing this local legislation now, the same percentage received by the Dome would provide the much-discussed partial funding for a new stadium, with no new tax or additional cost to taxpayers. No referendum is needed.
This model has proved so successful, jurisdictions across the state widely emulated it. Georgia now has more than 200 communities with a local hotel tax based on this mutually beneficial model. It is also standard practice around the country.
Today in Atlanta, visitors pay an 8 percent hotel tax that generates approximately $53 million annually. Hotels also collect an 8 percent sales tax: 4 percent for the state of Georgia general sales tax, and 1 percent each for MARTA, a local option sales tax, a water/sewer tax and a special purpose local option education tax. All of these local and state taxes, paid by visitors, significantly reduce the tax burden on the community.
The hospitality industry is one of Atlanta’s largest private-sector employers and one of the largest industries in the state. Much of this success is undoubtedly due to the foresight of hotel and political leaders, both state and city, in the 1970s who came up with a way to build one of the largest convention cities in the United States without asking local taxpayers to do anything other than benefit from its success.
Their vision has paid dividends millions of times over and continues to support many thousands of jobs for Georgians.
Ron Fennel is executive director of the Atlanta Hotel Council.