#ncga: Lee County’s tax-and-spend-and-spend RINO rides again
John Sauls is no stranger to the North Carolina House. The Lee County Republican previously served in the House a decade ago. The highlights of his tenure then included sponsorship of a sales tax increase for his constituents and support for financial aid for community college tuition for illegal aliens.
Well, Lee County brought him back in 2016, and he’s thanked them by introducing an occupancy tax for motels in Sanford. The 3 percent city occupancy tax goes on top of the already existing county occupancy tax. A real kick in the cojones to the hospitality industry in his district.
Two percent of the proposed city tax will be to subsidize the money-bleeding and failing Dennis Wicker CIvic Center. One percent will be to — get this — promote tourism in Sanford.
The Democrats kept trying for years to get this rammed through the General Assembly. Looks like they’ve finally found a member of the Republican majority willing to do their dirty work for them.
Sanford apparently hasn’t learned a thing from Raleigh’s adventures with subsidizing a civic center: 
The first week of January, Triangle Business Journal ran a story with the headline, “Raleigh Convention Center director wants to double its size.” In it, Doug Grissom, director of the Raleigh Convention Center, said there was more demand than the center could meet and that he’d like to double the space available for events. “We’d like to expand …We’re turning away business …The demand is there.”
I was surprised. Everything I’d heard led me to believe the convention center was losing money. Was I wrong? Were they actually making a profit and ready to expand?
One of the things about city-owned property is that you can usually find some financials, so I started digging around the City of Raleigh’s government website, and I found the Comprehensive Annual Financial Report. This is a document sure to cure insomnia — literally hundreds of pages of financial reports and spreadsheets. But there’s a lot of good, hard information in there.
The Convention Center is part of the larger Convention Center and Performing Arts Complex, which includes the Duke Energy Center for the Performing Arts, and the Red Hat Amphitheater. This means that some of the numbers cover the whole complex, not just the Convention Center itself, making it a little difficult to isolate just the Convention Center numbers the way I’d like. But here’s what I did find.
According to the City of Raleigh’s own accounts, the revenue from user charges at the Convention Center totaled just more than $6 million last year. Expenses were a little more than $8 million. That means revenues only covered three-quarters of expenses last year.
And if we look at that whole Convention Center and Performing Arts Complex? Well, the picture is similar, with total user charges of a little less than $14 million and expenditures of more than $17 million. That’s before we factor in the debt service for the complex, which ran to $25.5 million last year. The whole operation is deeply in the hole.
Enter the taxpayers. The Convention Center is surviving because Wake County taxpayers are subsidizing it (so if you live in Wake County, thanks, or maybe more appropriately, I’m sorry). We’re not talking about a small grant to help make ends meet. No, we’re talking tens of millions of dollars. The Convention Center Financing Fund alone contributed almost $20 million last year. That’s a fund of occupancy and food taxes from around the county, so every time you go out to eat you’re putting a little bit into the $20 million pot that props up the Convention Center.
If it was a private business, the Convention Center wouldn’t be looking to expand. Quite the opposite. It would be trying to figure out how to generate more revenue or trim costs so that it could avoid imminent bankruptcy. It would be in absolute crisis mode.[…]
So, the alleged “conservative revolution” has come to THIS — bailing out Dennis Wicker’s legacy?
Surprise, Surprise. Bureaucrats and their business projects need an inflow of tax dollars-in one form or another to just break even. WBBJr
Yeah. How dare the citizens of Lee County feel like they should have the same local hotel tax as virtually every other county in the state?
And how dare the citizens of Lee County want the same type of tourism development authority that exists in all those other counties?
First of all, I’d ask that you read Rep. Sauls’ bill. Since it’s obvious that you haven’t, let whomever fed you this story know that the bill does not – in any way, shape or form – allocate ANY money to the Wicker Center. Each of the three cents in this new tax would go to the Sanford TDA.
And thanks, one last time, for the jab about Lee County tourism. That was real classy.
You’re an officer with the Temple Theatre. SO, it’s no surprise you’d be a big fan of more government money to promote your offerings. And you are really blowing some smoke if you expect us to seriously believe the Wicker Center will not see one dime from this new tax. (The Temple Theatre and stuff at The Wicker Center are about the only things drawing visitors from out of town into Sanford anymore.) The deal has already been cut.
Read the bill. 100% of this bill is earmarked for a Sanford TDA. Those funds are not intended to “go to” any particular business. The intent is to use those dollars to promote tourism as a whole, and bring more visitors to Lee County, generally.
Am I a “fan of government money to promote” the Temple Theatre? Absolutely. The Temple Theatre operates on a budget of less than $1 million. The estimated positive impact on the local economy is $7.8 million, annually.
From Lee County, we do receive funding – currently, $8,000 a year. In turn, we pay $13,000 in performance ticket sales tax to the county. So essentially, our support from the county is -$5,000.
As it applies to performance venues nationally, about 45 – 50% of their operating budgets should come from ticket sales. The rest comes from donors, sponsors, and government entities. At the Temple, nearly 70% of our revenue comes from ticket sales. Why? Because our government support has nearly disappeared altogether.
Public/Private partnerships. Right? In the last five years, the Temple has made nearly half a million dollars in capital improvements. The government’s contribution toward that? Nothing.
To your last point, the Temple is a year round attraction that brings tens of thousands of people through the doors. 55% of our audience members come from outside Lee County. Those same people are eating, drinking, and shopping while they’re here. The impact is enormous. And imagine how much more we could do with just a little bit of government support.
Same can be said for our golf courses. Deep River Sporting Clays brings people to Lee County from, literally, all over the world. Endor Paddle Company. The list goes on. We’re all operating without the baseline support that every other county in North Carolina gives their tourism and hospitality industry.
So, yeah, a little help would be real cool.
Sources tell me you are a candidate for this new TDA director job. Care to confirm or deny?
I would be happy to sit on the TDA board, but I have no interest in the director position.
It does not seem that the “citizens” had any say in the matter. Just another case of government growing in order to grow government. Just because county X has a useless department to over-estimate dollars spent on tourism does not mean Lee county needs the same.
The same concept can be said for these “Centers” and stadiums. They rarely pay for themselves and in a smaller area like Sanford will rarely hold an event of much consequence.
The debate has about this tax has been going on for years. The majority of local business leaders have repeatedly come out in favor of it.
Additionally, John Sauls was clearly on the record as supporting a new occupancy tax throughout his entire campaign. This bill shouldn’t come as a surprise to anyone.
Painting him as somehow forcing this on the citizens of Lee County is unfair. In this case, he’s doing what the Sanford City Council, Sanford Area Growth Alliance, the Chamber of Commerce, the Visitor Services Committee, and a half dozen other organizations asked him to do.
Support for this bill from the business community in Sanford isn’t unanimous, but it’s pretty close.
Could this TDA become a useless department? Absolutely. Getting the right people involved, stretching those dollars as far as humanly possibly, and realizing a tangible return on investment has to occur.