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2011-01-20

Bandera's dwindling 'heads in beds' taxes cuts aid to non-profits

By Judith Pannebaker BCC Editor

Falling tax revenue garnered from the Hotel Occupancy Tax - aka "heads in beds" tax - may force local nonprofits to settle for half to three-quarters of a loaf in funding this year from the City of Bandera.
During a city council meeting on Thursday, Jan. 6, event coordinator Genie Strickland had requested $10,000 for advertising for the 2011 version of Celebrate Bandera. The four-day extravaganza is traditionally held over Labor Day weekend in September. However, she gratefully settled for $8,000 - half in April and the remainder in July. Strickland was told that the remaining $2,000 might become available later.
While City Administrator Gene Foerster felt the requested funds would be forthcoming, he also noted, "It's gonna be close."
Councilman Binky Archer was more optimistic, however, saying, "I think we'll be okay with the funds coming in."
The $8,000 would fund roughly half of the annual event's $16,000 advertising budget, Strickland said, who also must make up another shortfall.
Perhaps as a response to the State of Texas' budget deficit - projected to be as much as $27 billion - no GO TEXAN matching funds will be available this year from the Texas Department of Agriculture, she added.
The city had already committed $18,000 to the Bandera Business Association from the hotel-motel tax revenues - to be paid quarterly in the amount of $4,500. That promise loomed over council members, making them reluctant to commit more funds from an ever-dwindling pot.
"I can't ask for what you don't have," Strickland told the council, adding that she was hesitant to take funds from other nonprofit events - including the Wild Hog Explosion - which Strickland also coordinates.
Slated for Friday and Saturday, March 18 and 19, that event serves as the main fundraiser for the Bandera County Public Library. For the last two years, the Wild Hog Explosion had been rained out, which put a crimp in library projects, said Library Director John Hegemier, who also serves on city council.
The funds will be used to augment the fundraiser's $3,000 advertising budget, the bulk of which is being done on the Internet.
Speaking out in favor of the $1,500 request, Mayor Horst Pallaske said that the event brings visitors to the area.
By a 3-0-1 decision, with Hegemier abstaining, council approved funding the Wild Hog Explosion.
Later, questions arose about whether all area hotel, motel and bed & breakfast operations were paying their fare share of taxes to the city. "The bed tax is diminishing because no one is enforcing it," opined James McGroarty, owner of the 11th Street Cowboy Bar, "and it's hurting Bandera's economy." He also decried what has been described as substandard accommodations and the price gouging that occurs during celebration weekends. "Bands would rather stay in their vehicles rather than spend a night in some of these places in the city," he added.
In a later interview, Foerster attributed AN 8 to 10 percent decrease in HOT funds to "one less payer," referring to the Frontier Hotel at the now shuttered Texas Square complex. "In addition, the former owner of the hotel was delinquent in paying his taxes," Foerster said.
Another venue in the city is also in arrears in taxes owed the city, he noted. "As for the rest of the places, their client volume has also decreased, which gives the city less tax money."
During the meeting, everyone agreed it would behoove city administrators and elected officials as well as event organizers to schedule a workshop on the most judicious use of hotel-motel tax revenue.
Hotel-motel taxes are relegated to the city quarterly. The next infusion into city coffers is expected on Monday, Jan. 31. "We'll know better where we stand when we received those funds," Foerster said.