By Adam Probolsky.
As cities consider their options for new revenue sources in 2016 and beyond, transient occupancy taxes (TOT) are often high on the list.
TOT is not usually a driver of big dollars, at least no where near as big as a new parcel tax or increase in a utility user tax. Most cities can’t get a huge boost to their General Fund by increasing their TOT even by a few percentage points. That’s because their hotel and motel base just isn’t that large. But, the test for passage is not usually all that high either…which makes it an attractive prospect.
And there’s more that appears to sweeten the pot.
Elected policymakers – even those reluctant to put new or higher taxes on a ballot – are attracted to TOT votes because they can explain them away as hotel visitor taxes. It’s a tax paid by tourists and business travelers, not residents.
Meanwhile, staff embraces increasing TOT because it’s a simple formula that doesn’t usually require detailed economic studies or engineering reports (unless of course you happen to be a large tourist destination). Generally, it’s just a matter of identifying what surrounding cities charge and figuring out the “threshold of tolerance” of your unique city.
This usually comes down to two questions: 1) At what point does a higher TOT drive away customers? 2) Are hoteliers organized and actively campaigning against the measure?
So it would seem then that every city manager in a city or town with at least one Motel 6 and an Embassy Suites should call his or her city attorney this morning and start drafting ballot language today.
Not so fast.
Just because TOTs don’t directly impact the voters of a given city, doesn’t mean that voters will just rubber-stamp raising a tax on someone else, just because. Unsuspecting city leadership might be surprised at the average voter’s sense of fairness and visceral desire to do what is right. And sticking it to the business traveler – who is bringing jobs to the local economy – might not be a great motivating message.
Every city needs to find out what voters really think, and how they respond to different messages. Otherwise, cities risk leaving their future entirely in the hands of chance and allow opposition groups to frame the debate entirely.
If cities want to ensure that the residents know their side of the TOT issue, they need to engage in a robust and real education campaign. And anytime you conduct outreach, smart money does research in the form of polling, and for larger efforts, focus groups.
Polling helps determine timing (which election date is best), which messages voters appreciate the most, how to address active opposition and how to target resources when doing outreach/education.
Ask your city attorney: Polling research, outreach and education are in no way advocacy. It is simply a best practice of understanding what the public thinks and then engaging in a meaningful discussion about what happens if the ballot measure passes or fails.
Any major undertaking by local or regional government should start with polling and education. Because even when it comes to the relatively easy-to-pass TOT measure, there are no guarantees.
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Adam Probolsky is CEO and pollster at Probolsky Research, which works for business, government, and non-profit clients.