Municipal grants to cultural arts groups and events next year in Longview might be greatly reduced from past years — if available at all — as the city considers the effects of a bruised economy on hotel occupancy tax revenues.
Community Services Assistant Director Dietrich Johnson is awaiting word from Finance Director Angela Coen, he said, for estimates on how much revenue the city should expect when the next fiscal year begins Oct. 1.
“She determines that number, and at this time, it does look like it will be a very, very much reduced opportunity, in terms of collecting that tax available,“ Johnson said.
As for whether grants will or won’t be available, “That decision has yet to be determined totally,” he said.
Like other state and local governments, Longview municipal administrators are expecting diminishing revenues in 2020 as social distancing requirements instituted to prevent the spread of the novel coronavirus have resulted in significantly fewer tourists and other people staying in local hotels and motels.
Hotel occupancy nationwide declined 42.3% in March compared with March 2019, according to consumer and marketing data firm statista.com .
“For March HOT collections, which represents February occupancy, we saw approximately a 7% decrease,” city spokesman Shawn Hara said. “We do not yet have final numbers for April HOT collections, which represent March occupancy, but so far, some of the receipts appear similar to that national statistic. We are anticipating there to be a more drastic decline in April occupancy and beyond, though, due to the travel restrictions.”
Eight Longview groups — Longview Symphony League, ArtsView Children’s Theatre, Longview Ballet Theatre, Longview Museum of Fine Arts, Gregg County Historical Museum, East Texas Symphonic Band, Longview World of Wonders and Theatre Longview — received grants from a $275,000 pool of funds. The grant money comes from a 15% divvy of the city’s hotel occupancy taxes revenues in fiscal year 2019.
Lindsay Loy, executive director of the Gregg County Historical Museum, said she was involved in a teleconference in March with the city and other arts groups when they were told to expect zero grant funding.
“We were told zero. We were told not to expect any HOT fund grants for next year,” Loy said, adding that the groups were allowed to carry over grant funds they received this year to use in 2021.
Hearing grant money might be available next year gives her hope, she said.
“We didn’t expect any new funds to become available ... and have been planning accordingly to write (applications for other) grants for next year,” Loy said. “If we do get any (from the city), it will probably be about $5,000 to $10,000” compared with the $42,100 grant the museum received for 2020.
Johnson said the grants for 2019-20 already have been funded.
“They are not impacted,” he said. “We have already given their money up front.”
If funds are available, the application process will begin in early to-mid May.
A variety of community-based programs and activities that enrich local tourism are supported by hotel occupancy tax revenues.
Owners, operators or managers of local hotels, motels and bed and breakfasts, as well as condos, apartments and houses rented for fewer than 30 consecutive days, must collect hotel taxes from their guests.
The tax rate totals 9%, but 2% is devoted to construction, expansion, maintenance or operation of convention center facilities, Hara said.
“We primarily have used those funds for capital projects at the Longview Convention Complex, which are cash funded from the available fund balance in that account. This year, there were $1,114,419 in expenses budgeted, which included Maude Cobb Convention Center improvements, replacement of marquee signs, construction of a storage building and purchase of adjacent property,” he said.
The other 7% funds several items:
- Longview Convention Complex: $945,087
- Convention and Visitors Bureau: $475,000
- Sports Tourism: $373,101
- Arts and Culture: $313,074
- Nondepartmental/Collections Costs: $60,000
- Historic Preservation/Special Services: $6,000
Hotel occupancy taxes account for 1.5% of the city’s $177.9 million budget. Among the revenues, 36% comes from charges for services, 20% comes from sales taxes, 18% comes from property taxes, 8% comes from interfund transfers, 6% comes from special revenue, 4% comes from the fund balance, 3% comes from franchise taxes, 3% comes fees and fines and 2% comes from grants.
“We are anticipating a significant decrease in hotel occupancy tax revenue for the remainder of this fiscal year with some rebound beginning next fiscal year as business and leisure travel adjusts,” Hara said.
“The city has been making reductions to expenditures within the budgets of the Longview Convention Complex, Convention and Visitors Bureau, and Sports Tourism, while still keeping those functions operational,” he said. “It is important to have those functions ready to go when travel and related opportunities resume. We have some available fund balance to meet the short-term need while revenues are low, but we will have to continue to monitor and evaluate moving forward.”