Ostensibly aimed at combatting an increasing problem with the city’s homeless population, the Mayor is suggesting an increase in Austin’s Hotel Occupancy Tax as well as reallocating property tax revenue for public improvement projects.
On Sunday night, Austin Mayor Steve Adler proposed a plan that aims to curb the city’s homeless problem s by establishing a Tourism Public Improvement District (PID) downtown. The taxing district will increase the Hotel Occupancy Taxes paid by tourists by around 1-2 percent, giving planners between an extra $4-8 million to spend annually on the city’s homeless programs.
Hotel Occupancy Taxes are, at least in theory, levied to promote local economic development and tourism.
The plan would require the support of the city’s hotel industry and in order to get them on board, Adler has suggested a convention center expansion – at $609 million. Earlier this year, the Vision Task Force had suggested a 2 percent H.O.T. increase in order to pay for the expansion – completely separate from the Public Improvement District tax that Adler is also suggesting.
Combined, that’s a total of 3 percent in possible lodging increases for visitors to the capitol city – for a convention center and homeless programs. The two increases would raise HOT rates from 15 to 18 percent.
Additionally, Adler suggested creating a downtown tax increment finance (TIF) district – which would divert increasing revenues from property taxes towards ‘public improvement projects’, such as homeless services.
Like clockwork, Austin’s leadership answers every potential issue the same way: more spending, more taxes, and more programs.