One who intends to leave others better off for his having existed.

2/3/14

Amanda Lehmert contradicts Sunday's News & Record Editorial on the downtown hotel deal

The council will consider paying $395,000 a year over five years on the project. Hotel investors told the N&R editorial board last week that the city would bring in $535,000 a year in tax revenue from the project -- a net gain in tax revenues.

That's true -- sort of.

The city estimates the hotel will generate in between $475,000 and $548,000 each year for Greensboro, by way of property taxes, sales taxes, business improvement district taxes and hotel taxes. (Those figures are based on the hotel having a 59 to 65 percent occupancy.)

Questionable

If you look at it that way, then the project will pay for itself.

But not all those taxes flow back into the city's general fund -- the property tax fund -- which will be paying out the incentive. Hotel taxes and BID taxes, in particular, can't be spent to, say, pay a firefighter's salary.

The city expects to earn a $1.03 million in property taxes from the project in the first five years.

If you take a wider view of "city revenue" and include sales tax into the mix, the city staff still predicts the project will be $531,000 short of paying for itself..."

http://www.news-record.com/blogs/killian_lehmert_the_inside_scoop/article_87ccd214-8d0c-11e3-9f71-0017a43b2370.html
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And then there is the Billy Jones factor on delinquent taxes;

http://greensboroperformingarts.blogspot.com/2014/02/greensboro-giving-incentives-to-tax.html

1 comment:

W.E. Heasley said...

George:

“The city estimates the hotel will generate in between $475,000 and $548,000 each year for Greensboro, by way of property taxes, sales taxes, business improvement district taxes and hotel taxes.”

Economic impact studies of which increased tax revenue is generally highlighted are predictive in nature. Stated another way, economic impact studies are guesses. The studies also suffer from major confirmation bias.

Which raises a question: Given all the notional political propositions of the last two decades in Greensboro, from music halls to swim centers to hotels to the coliseum, the summation thereof, Greensboro should have so much tax revenue coming in per all the economic impact studies, should not Greensboro residents have zero to near zero taxes to pay themselves? That is, all the mountains of tax revenue each proposition and its accompany economic impact study promise should have created a zero tax rate for Greensboro residents.

Yet taxes continue to rise. Funny how that works, huh?