Committee favors slight cut in hotel-motel funds to non-profits

A City Council committee on Friday backed the recommendation of City Manager Jeff Pomeranz to use the city's hotel-motel tax revenue to fund local cultural, educational and entertainment non-profits that count on the money at 93 percent of what the group receives in the current fiscal year.

The full council will take up the matter at its Tuesday meeting.

Earlier in the year, non-profits who receive hotel-motel funds had been warned to expect much deeper cuts. However, the city does not need to use some of the $2.5 million in projected annual revenue from the hotel-motel tax to pay additional costs related to the debt on the city's ice arena or to cover some costs associated with the renovation of the U.S. Cellular Center, city officials have said.

Jen Neumann, who heads up the city's Hotel-Motel Allocation Committee, noted Friday that not every individual non-profit in the cultural, educational and entertainment funding categories will see a seven percent decline, but the pot of hotel-motel funds for the group will decline that much.

About 70 percent of the $2.5 million in funds, which is generated by a 7 percent tax on hotel and motel use, goes to pay off debt on a variety of building projects or to "primary" recipients. The Cedar Rapids Convention and Visitors Bureau is slated to receive $704,000 as a primary recipient and $300,000 is being set aside in the category for the city's new Convention Complex. The U.S. Cellular Center arena, which is part of the Convention Complex, typically receives funds as a primary recipient. The bureau and center are viewed as two entities that play a big role in getting visitors to come to town and stay in hotels and motels.

The City Council's Finance and Administrative Services Committee on Friday agreed that the city should forewarn non-profits that there may be less hotel-motel revenue available for them in future years.