Eureka Springs City Council members agree that repealing the city’s tourism tax and abolishing the city advertising and promotion commission would have “significant” effects on the city.
The council spent a large portion of its regular meeting on Monday, Aug. 12, discussing the issue.
“Tourism has long been a cornerstone of our economy,” said city council member Autumn Slane, who brought up the possibility of drafting an ordinance to have a proposed city tax added to the ballot in case the tourism tax is eliminated. “The revenue generated from our tourism tax plays a crucial role in supporting our businesses, allowing them to thrive and create jobs for our residents.
“The potential loss of this tax poses a significant threat to our economic stability. Without it, we risk financial impacts on our local entrepreneurs and their ability to operate successfully in an already challenging economic landscape. Our businesses are already facing daunting challenges, from rising costs to changing consumer behaviors. In this environment, losing an additional revenue stream is not just a setback. It could be a tipping point that leads to closures and job losses. We can’t afford to allow our local economy to suffer further due to poor planning or lack of foresight.” Resident Pat Matsukis has been trying to gather 148 signatures to place a measure on the Nov. 5 general election that would allow voters to decide whether they want to keep the city’s tourism tax and CAPC. The 3 percent tax is collected on lodging, food and beverage sales and funds the city’s advertising and promotion efforts.
“She’s getting so close to getting the signatures,” Slane said. “And Miss Pat is pushing forward and this will go on the ballot. If this goes on the ballot … we cannot just be sitting ducks.”
Council member Steve Holifield, who also serves as chair of the CAPC, said he’s heard from many residents that the petition was being misrepresented and he’s concerned that many have signed without fully understanding its intent.
“I really encourage anybody in the public that signed this petition and did not know what they were signing, weren’t totally educated about it, call [Matsukis] up and tell her to take your name off that petition,” Holifield said. “I have had more than one person tell me that she misrepresented herself and what this petition is and that’s got to be illegal. I can’t believe a person can do that.”
Council member David Avanzino, also a member of the CAPC, said if enough signatures are obtained, the petition will have to be approved by the county clerk.
“Anybody can start a petition for whatever,” Avanzino said. “That’s the thing. She has the right to do that. Has she thought clearly about the repercussions? Absolutely not. But if she gets the required number of signatures, this will go to the county clerk’s office and they will decide if it’s been legally done and that’s on them. It’s not on who’s signing it. Is she misrepresenting what she’s saying? I don’t know; she hasn’t approached me with it.
“I’ve seen the ordinance from both our city clerk and the county clerk, and I will tell you, they do not match. So, that’s one obstacle she’s going to face when it comes up to submitting her signatures. If there are other obstacles, like we’ve all said that we’ve heard … they’re going to look at this stuff and find out if it’s the truth. It may go to the ballot. It may not, especially if she’s doing the things that we are hearing that she’s doing.”
Regardless, it’s important that residents continue to be educated on how eliminating the CAPC and tourism tax would impact the city, council member Terry McClung said.
“The city should endorse, with a newspaper ad or something, where we endorse the CAPC and support the CAPC and the benefits that the taxes they collect, provide the city,” McClung said. “I mean, that’s the driving force to help the tourism industry. … Just in the newspaper and on social media is not going to do it. It needs fliers taken door to door, shaking hands and greet people.”
CITY SERVICES COULD BE AFFECTED
Even though the tourism tax is only collected from restaurants, bars and lodging businesses, eliminating the tax would affect the number of people who visit the city, thus affecting other taxes and services, Avanzino said.
“Some of the business owners have done a study on this,” Avanzino said. “If this tax is repealed, every single citizen within the city limits would have to spend a little over $21,000 (a year) to make up for that lost revenue, because with the CAPC tax going away, it also is going to affect your sales tax, your liquor tax, whatever taxes are added on. There’s nobody coming into the city.
“If you think infrastructure is bad now, wait until that happens.”
During council member comments, Avanzino went into more detail about how he feels eliminating the CAPC could affect residents.
“For those people who are trying to get this or sign this petition and get it on the ballot, you need to start thinking about what it is you want from the city you live in,” he said. “Do you want continued infrastructure improvement? Do you want continued police support? Do you want continued fire and EMS? Because, without this tourism tax and the taxes that are subsequently collected because of those tourists, you’re not going to have those things anymore. You talk about a budget, there’s hardly going to be a budget for the city if those things go away.
“So, pay attention to what you’re signing. If you want to get involved, get out from behind your keyboard and come to an actual meeting. Let your voice be heard instead of getting behind the keyboard and being so vocal about it when you never attend a meeting, never come to a workshop. Start coming to the meetings and ask us questions. That’s what we’re there for.”
COVID COMPARISON
Mayor Butch Berry, who earlier in the meeting reminded council members that the last time a city tax was placed on the ballot to support The Auditorium it was defeated, agreed that city positions could be affected if tourism numbers go down drastically, using what happened during COVID-19 as an example.
“When COVID came and hit us … when we first got our tax statement then we were down 45 percent in taxes for that month,” Berry said. “… The options for city council at that time, if that was to to continue on as Mr. Avanzino said, was to lay off police and fire. That was the only options that we had. Public works was right next to it. So, all of the sudden we’re laying off our people that do our infrastructure just because we didn’t have our tax. … In March, when that happened you could walk down Spring Street when the hotels were closed, the restaurants were closed, the businesses didn’t have anybody coming down the street and they closed. On a Saturday afternoon you could roll a bowling ball down Spring Street and not hit a car, much less a person. It was literally a ghost town.
“That’s the ramifications when you don’t advertise and tourism doesn’t come to the city. We’re very fortunate. We have the best industry in the world. The cleanest industry. I wouldn’t trade our industry for any other city in the world. … Tourism has always been part of our community. The people who move here who don’t want tourism just want to close that door because most of them came from somewhere else and they just want to shut the door on what it was.”
MOTIVATION
Holifield said Matsukis indicated that past mistakes and controversies surrounding the CAPC are what have led to her petition. Avanzino and Holifield have the longest tenure of all the current commissioners, serving their second one-year terms as representatives from the city council. The remaining five members have been brought on within the past year, with three approved within the past two months.
“When I ask why she’s doing this, she said this has been going on 40 years and it’s not working,” Holifield said. “But, other people have told me that there’s a group of people in town who just want to do away with tourism. They loved the town 40 years ago … It’s not really what the CAPC is doing right or wrong, it’s they just don’t like tourism. They don’t like the motorcycles, they don’t like the crowds. They want it to just go back to where it used to be.”
McClung interjected that the city had just as much, if not more, tourism 40 years ago.
“I think we’re at a turning point in our community, especially with this coming to a vote,” Slane said during council member comments. “I think we should think outside of the box and try to protect ourselves. This is scary and uncharted territory and I just don’t want to be caught and it hit us in the face. Tourism is our only industry. I would hate to see it shut off because of a simple ballot item like this.
“Please educate yourselves.”
