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By Shaun McKinnon, The Arizona
Republic Visitors to Phoenix would pay one of the highest rental car taxes in the nation if Proposition 302 passed next week, but supporters of the measure say its boost to the state's tourism industry would offset any losses from disgruntled travelers who went elsewhere. The tax on a rental car would total about 17.75 percent under Proposition 302, which would raise $1.8 billion to build a new Arizona Cardinals stadium, promote tourism, expand the Cactus League and support youth recreation. Only Seattle, at 18.3 percent, imposes a higher car rental tax among 10 major tourist and convention cities. The ballot measure also adds 1 percent to the hotel room tax, bumping the rate in Phoenix to just over 12 percent. That's near the national average, but higher than some of the Valley's hottest competitors for tourism dollars, including Las Vegas, San Diego and Orlando. Some travel industry experts say the proposal asks tourists to pay too much toward facilities they may never use. But state tourism officials insist that the ballot measure would benefit tourists and believe that, over the long term, the money set aside to attract travelers would do its job. "It would be a significant amount of money compared to what we have to deal with now," said Mark McDermott, Arizona Office of Tourism director. "We can do a lot with it." The tourist taxes are a cornerstone of both the funding plan and the advertising campaign for Proposition 302, which has been sold as an initiative that would cost the average Maricopa County taxpayer little or nothing. Together, the hotel bed and car rental taxes would generate an estimated $1.2 billion over 30 years and would pay nearly half the cost of the $335 million stadium. Jim Ball, president of the Valley Hotel and Resort Association, said he doesn't believe most tourists would notice the higher taxes, especially the extra 1 percent on a hotel room. But hotels and other tourism-dependent businesses would notice if Arizona's efforts to lure new tourists continued to lag, he said. "The fact is that Arizona as a state and Maricopa County are way behind major metro areas in the money that is spent to promote tourism," he said. "We are losing market. Las Vegas is starting to tap into our markets with new golf courses and high-end resorts. We need to compete." Proposition 302 would direct nearly $250 million toward tourism promotion and $194 million to the Cactus League, which officials say is a valuable tool to woo winter travelers. Additional money could be available if revenues are strong through the 30-year life of the plan. Most of the money raised by the measure would have to be spent on promoting Maricopa County, McDermott said. Pima County voters are considering a room tax that would provide money to promote tourism there, and a separate piece of legislation would help add funds for statewide programs. Whether spending more money on ad campaigns will attract new visitors remains unclear. Backers of Proposition 302 cite studies that say every $1 spent on promotion would generate $3 or more in tourist spending. But in an analysis of the bill that authorized the vote, the Joint Legislature Budget Committee was unable to verify those claims. Even small gains can produce big rewards, McDermott said. Increasing Arizona's share of the non-resident leisure travel market by one-tenth of 1 percent could generate about $240 million a year on new spending. "I think the hospitality industry gave careful consideration as to whether we felt a tax increase would cause a decline in business that could not be more than offset by an increase in tourism," he said. Arizona's decision to turn to tourists for the stadium package follows a nationwide trend that began nearly a decade ago. According to the Travel Industry Association of America, as many as 20 major cities tax tourists for sports facilities. The group generally opposes such taxes, spokesman Cathy Keefe said. "We're not opposed to taxes in general, but we want them to be used for things that will support tourists: infrastructure, better roads, police and fire protection," she said. "Most tourists will not benefit from a sports facility." Barbara O'Hara, vice president of government affairs for the American Society of Travel Agents, said she thought cities had given up on asking tourists to fund local projects. In a rush of bad publicity several years ago, New York City slashed what was then the nation's highest room tax of more than 20 percent, and earlier this year, Florida Gov. Jeb Bush killed a plan to tax cruise ship passengers to build a new football stadium. "Once you increase the taxes and make it cost-prohibitive, you don't have as many people traveling or using rental cars or staying in hotels," she said. "It all starts to add up." But it's just too tempting for some cities. * San Antonio voters approved a plan last year to finance a new stadium by raising the bed tax 1.75 percent and the car rental tax 5 percent. * Seattle voters have approved separate plans to finance a baseball stadium with a 2 percent car rental tax increase and a football stadium with an eight-year extension of a 2 percent bed tax that previously funded the defunct Kingdome. * Houston wound up with the nation's highest bed tax, at 17 percent, with a plan to build what will be the most expensive football stadium ever, a $367 million home for the expansion NFL Texans. The city earlier added 5 percent to the car rental tax to build a downtown facility for the Astros baseball team. On the other hand, a spokesman for the
Houston Hotel and Motel Association said, the city was awarded the 2004
Super Bowl on Wednesday, an event that Proposition 302 backers believe they
can bring to Arizona with a new stadium. |
