Hotel-motel tax revenue will fall short

In his first month in office a year ago, Mayor Ron Corbett met with members of the cultural arts community to tell them to look for less revenue from the city's 7-percent hotel-motel tax than they had grown to expect to close their budget gaps.

Come the budget year that starts July 1, last year's word of warning looks like it really will come true.

In his budget presentation to the City Council this week, City Manager Jeff Pomeranz said he anticipates providing $331,700 less - or 41 percent less - than in the current budget year to three of the four categories of recipients of hotel/motel revenue. Those categories - community cultural and education organizations, community recreation and events, and new and emerging organizations and events - consist of 27 entities that now share about $800,000 of the $2.5 million annual pot of hotel/motel revenue.

Terry Pitts, executive director of the Cedar Rapids Museum of Art, on Thursday said that museum has heard that it should expect only $20,000 from hotel/motel funds to help with its operation, down about $34,000 from the current budget year.

“A loss of $34,000 from hotel/motel funding next fiscal year is going to have us examining more cuts in hours and staff,” said Pitts, who said a larger budget-cutting effort at the museum already has meant reductions in staff hours and museum hours. “There is nothing else to cut, I'm afraid.”

Pomeranz emphasized this week that money from cuts to some hotel-motel revenue recipients would not be going to help the city pay off debt that the city will take on to cover the city's $23-million share of the cost for the $76-million Convention Complex project. That was Corbett's thought a year ago.

Instead, the city will direct money to a first category of recipients, the largest of which historically have been the Cedar Rapids Convention and Visitors Bureau and the city-owned U.S. Cellular Center and Paramount Theatre.

In the current budget year, the bureau is receiving $673,400 and the center and theatre, $331,000, or about 40 percent of the total.

Category 1 money also goes to pay off debt on The History Center, the Cedar Rapids Museum of Art, the Paramount Theatre and the city's Ice Arena.

Pomeranz's budget - the City Council makes final budget decisions - proposes to steer an additional $291,500 to Ice Arena debt, to which the hotel/motel fund this year pays $256,739. Half of the Ice Arena debt payment now is being paid by another source of funding, which won't be available in the next budget year, according to Pomeranz's budget proposal.

The proposed budget also sets aside $300,000 related to the temporary closing of the U.S. Cellular Center for renovation as part of the city's Convention Complex project.

Pomeranz has asked the City Council to take up hotel/motel funding after the council finishes with its budget by March 15.