Lack of advertising and promotion is the biggest obstacle to Corpus Christi's quest to be a successful visitor destination.
By Neal Trolinger
Note: Since this article was published here and handed out to members of the Corpus Christi City Council I have been contacted by Councilman Rex Kinnison and we have exchanged several e-mails about this subject. Although Councilman Kinnison represents a different district of the City than where I live he has been very helpful and has taken a good deal of time to assure me that the City has a desire to follow the legal requirements of Section 351 of the Texas Civil Tax Code.
The City is claiming to follow § 351.103 (2) (b) of the rule that would exempt them from the 50% rule only if they follow all other requirements of § 351.103. The funding of the Columbus Fleet debt and a few other odds and ends have kept them from being in full compliance thus far. However, Councilman Kinnison assured me that the Council was not going to require the CVB to cover the Columbus Fleet debt next year. That would free up about $250,000.00 in next year's budget for CVB marketing and advertising. I applaud this action and appreciate Councilman Kinnison's effort to set the record right. Perhaps the City will find a way to stay in compliance with § 351.103 and we will all see the return on a good investment.
NT July 7, 2002
Lately, we here in Corpus Christi, Texas have been entangled in a struggle that has pitted supporters of the latest Packery Channel development scheme against those who would like to see improvements to the downtown marina with an experienced tourism developer's involvement.
In a recent Corpus Christi Caller Times article Paul Schexnailder, developer of a proposed $677 million resort dependant on the dredging of Packery Channel believes that privatization of the marina via Landry's Seafood Restaurants, Inc. could hurt the ability of Packery Channel resort to attract tourists. This position may bring to the surface a lack of understanding of the tourism industry and raises serious doubt about the ability of the Packery Channel developer to deliver what he has promised.
What Mr. Schexnailder and his supporters seem to be saying is that a successful tourism destination being built in the area before his proposed 20 year development timeline is met would rob him of visitors. If that were the case nearly every successful tourist destination in the world would be limited to a "no growth status". This is a very weak argument at best.
The single biggest obstacle to the success of tourism in Corpus Christi is the lack of proper promotion and advertising to potential visitors and conventioneers. Since 1990 I have closely followed this City's involvement in the tourism business and one thing stands out above all else. Every City Council during the last decade has voted for a budget that does not allocate proper funds for tourism advertising and promotion. This action has not only damaged the ability of the City to "cash-in" on the financial benefits of tourism that have been promised to local residents and businesses, but it also violates Texas State Law.
Section 351 of the Texas Civil Tax Code requires that Cities who choose to tax patrons of hotels, motels and other bed accommodations use the money they collect in manner that promotes success in tourism. It just makes good sense to follow this law and promote what we as a community have invested so heavily in. There is a saying that "a business with no sign is a sign of no business". This is certainly the case with Corpus Christi's tourism business as we compete for our share of tourists expenditures.
Below is an excerpt from Section 351
of the Texas Civil Tax Code:
SUBCHAPTER B. USE AND ALLOCATION OF REVENUE
§ 351.103. Allocation of Revenue: General Rule
(a) At least 50 percent of the hotel occupancy tax revenue collected by a municipality with a population of 200,000 or greater must
be allocated for the purposes provided by Section 351.101(a)(3). For municipalities with a population of less than 200,000,
allocations for the purposes provided by Section 351.101(a)(3) are as follows:
(1) if the tax rate in a municipality is not more than three percent of the cost paid for a room, not less than the amount of revenue
received by the municipality from the tax at a rate of one-half of one percent of the cost of the
room; or
(2) if the tax in a municipality exceeds three percent of the cost of a room, not less than the amount of revenue received by the
municipality from the tax at a rate of one percent of the cost of a room. This subsection does not apply to a municipality, regardless
of population, that before October 1, 1989, adopted an ordinance providing for the allocation of an amount in excess of 50 percent
of the hotel occupancy tax revenue collected by the municipality for one or more specific purposes provided by Section
351.101(a)(1) until the ordinance is repealed or expires or until the revenue is no longer used for those specific purposes in an
amount in excess of 50 percent of the tax revenue.
(b) Subsection (a) does not apply to a municipality in a fiscal year of the municipality if the total amount of hotel occupancy tax
collected by the municipality in the most recent calendar year that ends at least 90 days before the date the fiscal year begins
exceeds $2 million. A municipality excepted from the application of Subsection (a) by this subsection shall allocate hotel occupancy
tax revenue by ordinance, consistent with the other limitations of this section. The portion of the tax revenue allocated by a
municipality with a population of more than 1.6 million for the purposes provided by Section 351.101(a)(3) may not be less than 23
percent, except that the allocation is subject to and may not impair the authority of the
municipality to:
(1) pledge all or any portion of that tax revenue to the payment of bonds as provided by Section 351.102(a) or bonds issued to
refund bonds secured by that pledge; or
(2) spend all or any portion of that tax revenue for the payment of operation and maintenance expenses of convention center
facilities.
(c) Not more than 15 percent of the hotel occupancy tax revenue collected by a municipality, other than a municipality having a
population of more than 1.6 million, or the amount of tax received by the municipality at the rate of one percent of the cost of a
room, whichever is greater, may be used for the purposes provided by Section 351.101(a)(4). Not more than 19.30 percent of the
hotel occupancy tax revenue collected by a municipality having a population of more than 1.6 million, or the amount of tax received
by the municipality at the rate of one percent of the cost of a room, whichever is greater, may be used for the purposes provided
by Section 351.101(a)(4). Not more than 15 percent of the hotel occupancy tax revenue collected by a municipality having a
population of more than 125,000 may be used for the purposes provided by Section 351.101(a)(5).
(d) A municipality that does not allocate any hotel occupancy tax revenue for the purposes provided by Section 351.101(a)(1) may
allocate not more than 50 percent of the hotel occupancy tax revenue collected by the municipality for the purposes provided by
Section 351.101(a)(5). A municipality that before October 1, 1989, adopts an ordinance providing for the allocation of an amount in
excess of 50 percent of the hotel occupancy tax revenue collected by the municipality for one or more specific purposes provided
by Section 351.101(a)(5) may allocate the tax revenue as provided by that ordinance until the ordinance is repealed or expires or
until the revenue is no longer used for those specific purposes.
(e) A municipality may use hotel occupancy tax revenue collected by the municipality for a purpose provided by Section
351.101(a)(1) only if the municipality complies with the applicable provisions of this section.
Added by Acts 1987, 70th Leg., ch. 191, § 1, eff. Sept. 1, 1987. Amended by Acts 1989, 71st Leg., ch. 2, § 14.24(b), eff. Aug. 28,
1989; Acts 1989, 71st Leg., ch. 1110, § 6, eff. Oct. 1, 1989.
Amended by Acts 1993, 73rd Leg., ch. 153, § 1, eff. Aug. 30, 1993; Acts 1993, 73rd Leg., ch. 680, § 5, eff. Sept. 1, 1993; Acts
2001, 77th Leg., ch. 1308, § 5, eff. June 16, 2001.
Get the full version of: CHAPTER 351. MUNICIPAL HOTEL OCCUPANCY TAXES
You may reach Neal Trolinger via e-mail: nt@netoutfitters.net