Eureka Springs City Advertising and Promotion Commission members didn’t hold back while voicing their opposition to a petition being circulated around the city.
Resident Pat Matsukis has been trying to gather 148 signatures on a petition seeking a public vote on whether to eliminate the city’s tourism tax and CAPC. The 3 percent tax is collected on lodging and food and beverage taxes and funds the city’s advertising and promotion efforts. Matsukis is seeking to have the proposal placed on the November general election ballot.
“I think this is grossly irresponsible,” CAPC chair Steve Holifield said at the commission’s regular meeting on Wednesday, July 24. “This petition, it would do away with the CAPC without any kind of economic feasibility study to see what would happen. I think a lot of citizens in this town would be open to discuss if there are alternatives to the CAPC, but that should have happened six months or a year ago to have a conversation and talk about and sit down and do a study to see if there is a proper way, another way of doing it.
“Every town or state that has ever voted away their A&P … have regretted it. The state of Colorado regretted it. The state of Connecticut regretted it. …There’s a town in Colorado that did away their funding and it took them 10 years to get tourism back to where it was.”
Commissioner David Avanzino said eliminating the tourism tax will trickle down and have a negative impact on other collections the city receives.
“I don’t think people are recognizing or seeing the economic implications of doing away with the CAPC,” Avanzino said. “We’ve got the 3 percent tax and with that 3 percent tax we collect alcohol, sales tax, all the taxes that come along with that. Getting rid of an agency that provides advertising to bring people to our city and cutting that off means you cut off tourists.
“If those tourists don’t come here anymore they won’t spend money and we don’t collect the tax anymore, alcohol taxes fall, sales taxes fall, unemployment rates are going to go up, homelessness is going to go up. People just don’t see the trickle-down effect of what this petition can do to our city. It would be devastating. We would lose millions and millions of dollars.”
Commissioner Kolin Paulk agreed, saying the lack of advertising would drive away tourists, which would cause businesses to suffer.
“We have over 60 restaurants [in Eureka Springs] for 2,000 [residents],” Paulk said. “When I said 2,000 people in Eureka Springs, that’s insane. It’s not because there’s 2,000 people who love to go out and eat. It’s because we have enough tourists to fill 60-something restaurants in Eureka Springs. That would not be the case without a CAPC.”
All business, including retail shops, would suffer if the CAPC is eliminated, commissioner Bradley Tate-Greene said.
“You’ve got 12 open shops downtown right now,” Tate-Greene said of former businesses that are currently vacant. “You’re going to have 24, 36 open shops taking [the CAPC tax] away. It’s really going to cause a lot of detriment.
“People like David, Kolin and myself, who run restaurants, may have to seek other opportunities and close our doors because we won’t be able to operate, and that’s our livelihood. We’re on this commission because we love this city and we want to serve everyone in the city and do what’s best for our city. … I don’t think some people know if you sign the petition and if it passes, getting the CAPC back after it’s gone is probably going to be close to nothing.”
Avanzino responded: “Oh, it is nothing.”
CAPC executive director Mike Maloney said he crunched some numbers when it comes to the money spent by tourists who visit Eureka Springs.
“The daily spend is based upon the [CAPC] collections that come in,” Maloney said. “If we just go back to the 2023 numbers, that’s $2 million [in CAPC taxes] collected. OK, 3 percent equals $2 million and 97 percent is approximately $80 million. The $80 million divided by 365 [days] is an average of about $275,000 per day spent on food and lodging in Eureka Springs. That doesn’t count alcohol sales, doesn’t count sales tax, retail sales.
“So when you take a look at just those numbers alone, do you want to take a quarter of a million dollars away that is spent every day in the city? I don’t really think you do. I really don’t.”
The impact would also be felt with city services, Maloney said.
“I do think we need to take a look at the significance of what will happen to city services,” Maloney said. “That’s really the tragedy. We only have 10 or 11 cops right now and we wouldn’t have that many. EMT services won’t be here. We will not have the same type of fire support. We wouldn’t have the infrastructure necessary to flush a toilet.
“Lets take a look at it very carefully because we make a decision to take something away that is really assisting the community in a big-time way because 96 percent of our income is based on tourism.”
Holifield has said previously that he wouldn’t be surprised if Matsukis collects the signatures required to get the measure on the ballot.
“She needs 148 signatures to be on the ballot November 5th,” Holifield said. “… She told me … she’s still collecting signatures, so we’ll see. This is really a scary thing to me for this town that we would just do away with something without a plan for the future. … I caution people, if you want to sign it, you have a right to do that. But please ask questions. Talk to us if you want to see what we’re doing, what the advertising is doing, what Mike is doing. We’re trying to do the best we can with what we got. We have some money and I think we’re being real responsible. Mike was talking about looking at something like a parking garage to help the community. We’ve given lots of money to the parks department. … I think the CAPC does a lot of good. And the CAPC runs The Auditorium.”
In the end, it’s all about looking forward and not looking at what has happened with the CAPC in the past, new commissioner Shira Fouste said.
“The only reason that I can see for eliminating our CAPC would be because somebody is looking backwards and we’re moving forwards right now,” Fouste said. “We’re making new decisions, new appointments, we have things that are on the precipice of possibly becoming something great and different, maybe even different than what we’ve seen as a city, all the way back in the history of our A&P.
“I think it would be really shortsighted to jump on the bandwagon to cancel something so casually without finding out where it has the potential to go. That frightens me a little bit.”
COMMUNITY MEETING ON PETITION The topic of the petition and the CAPC has gotten the attention of many business owners around the city and a community meeting hosted by Heart of Eureka on the topic has been scheduled for 9 a.m. Tuesday, Aug. 6, at Travelers Inn.
“Get the facts,” reads a post by Laci Moffitt of Heart of Eureka on the group’s Facebook page. “We have a couple of informed speakers coming to present FACTS about this dangerous proposal to end the CAPC tax.”
The post includes a photo of a colorful downtown with many people on the streets downtown above a black and white photo of the same streets deserted.
“The CAPC tax fund marketing and promotion of Eureka Springs — marketing and promotion essential for our economy,” the graphic reads. “Don’t let other’s misinformation destroy what we’ve built. Learn the facts. Protect our future.”
