Cedar Rapids modifying hotel/motel tax funding

CEDAR RAPIDS - Cultural, arts and educational organizations that rely on a piece of the annual revenue from the city's hotel/motel tax should rest easy, Mayor Ron Corbett says.

Corbett on Tuesday said the city intends to continue to fund organizations now receiving money even as changes are made to the program. The city plans to set aside some of the hotel/motel tax revenue to help pay off debt for its hotel and convention center projects.

The mayor noted that the city managed to hang on to its long-held, top AAA bond rating before this month's sale of bond debt. However, he said the city needs to make sure it keeps its top bond rating in the future.

The 7-percent hotel-motel tax, which in the last couple of years has brought in about $2.5 million a year, will be bringing in more revenue each year once the Convention Complex and hotel opens in 2013, Corbett promised.

He said the City Council will announce hotel/motel funding awards for community organizations in June, and said he anticipated the size of the individual awards would be similar to the three-year average. He said the intent was to “hold harmless” the recipients now receiving funds as the program changes.

Corbett said an additional $70,000 will go to the Cedar Rapids Area Convention and Visitors Bureau, which as the largest recipient receives about $700,000 a year, to help the bureau lure conventions to the Convention Complex.

Organizations that currently receive revenue from the hotel/motel tax will now have to apply for awards covering a three-year period. That way they won't have to reapply each year, they will know how much they will receive, and can plan their budgets accordingly, Corbett said.

Recipients, including such entities as the Cedar Rapids Museum of Art and the Indian Creek Nature Center, are now in the process of submitting applications to the new, three-year program, the mayor said.

The program also will not take applications from entities not currently receiving funds without special approval from the City Council.

“It's one of those things where you have all these horses in the stable and there's barely enough hay to feed them, so why open the door and try to invite a bunch more horses in,” Corbett said. “We're just going to try to take care of the existing beneficiaries to the best that we can.”

About half of the city's current hotel-motel revenue now goes for commitments unrelated to cultural, arts and educational organizations, which the City Council agreed to fund at its meeting last night.

Of the $1.258 million in spending approved last night for the fiscal year beginning July 1, $300,000 will help pay for the operation of the Paramount Theatre and the city's ice arena; $250,000 will go to Convention Complex debt payments; and $277,009 will go for debt payments on the ice arena. Smaller amounts will pay for debt for the Cedar Rapids Museum of Art, the Paramount Theatre and The History Center. Another $120,000 will go for the city's annual contribution to Priority One, now a part of the Cedar Rapids Metro Economic Alliance.

In addition, $25,000 will go to operations at the city's Ushers Ferry Historic Village and $3,500 to maintain the Tree of Five Seasons and memorials.