Voters will have a chance to decide November 2 whether to increase restaurant and hotel taxes in Jackson to finance the 245,000-square-foot convention center planned at Pascagoula and Farish streets. If approved by 60%, the restaurant tax in the city will go from 8% to 9% while the hotel tax will increase from 8% to 11%.
While as a whole the Mississippi Hotel and Lodging Association and the Mississippi Hospitality and Restaurant Association (MHRA) oppose the hospitality tax increase, camps inside the associations are divided on the issue. Whether it will effect the outcome remains to be seen.
“The MHRA has over 2,300 member locations,” said executive director Mike Cashion. “It is unlikely that we will ever have 100% agreement on any issue. While the opinions on issues may differ, the MHRA respects the rights of our members to voice their own personal and individual opinions. To thwart personal expression would be explicitly wrong.”
Jeff Good, owner of Bravo! in Jackson, said it was not a new development.
“For years, since the time I was the statewide president of the MHRA, the board has always looked at tourism taxes with a jaundiced eye,” said Good. “ It is a trade association, and it is acting exactly as a trade association would act, and should act … looking out for the special interests of its constituents. There are no hard feelings between restaurant and hotel operators on this issue. We simply disagree. Some are against it; most are for it. We truly believe that is the sentiment of most restaurant owners in the city, and those of us working for this campaign, are having no problem adding to our ranks.
“Just last week, a new member of our team carried cards and lapel stickers to a luncheon he was involved with. That is grass roots support! Those of us who live and really do business in Jackson understand what is at stake here. We need an economic engine for our city and this is the time to move. The convention center complex, as a whole, will fundamentally change the economics of Jackson.”
Scott Sledge, president of the Mississippi Hotel and Lodging Association, disagrees.
“The public has been misinformed about the room tax portion of the November 2 referendum,” he said. “Lodging properties are currently collecting 8% tax and an additional 75¢ per room to fund the telecom center. The 75¢ equates to about 1.25%. With another 3% on top of that, our 12.25% tax rate would be by far the highest in the state … and would put Jackson hoteliers at a competitive disadvantage.”
According to the American Economic Group’s 2003 IMPACT Study, for every 2% increase in sales tax, actual revenues drop by 2.4%, Sledge said.
“Tax rates in Rankin County are 9%,” he said. “Ridgeland has a rate of 8%. Business travelers are sensitive to tax rates. Why would they stay in Jackson at 12.25% when they could stay five minutes away for 8%? This proposed tax hike could spell disaster for many limited-service properties.”
Wanda Collier-Wilson, executive director of the Jackson Convention and Visitors Bureau (CVB), said she’s hoping for a positive vote.
“I don’t understand the opposition from some of the hospitality members,” she said. “From a business standpoint, it will do nothing but allow us to enhance our product. Yes, it may cause a few challenges, but the benefits will far outweigh those challenges. In order for us to continue growing tourism development for our city, we’ve got to do some things to make that happen. This convention center would provide a major catalyst to creating some opportunities for us.
“I’ve been at this bureau for 21 years, and there’s only so many different ways you can try and position the ‘same old, same old’ to make a sale. We’ve got to continue developing our product to make it a lot more attractive and beneficial to our client base. There’s a lot of business we can’t even attempt to go after because we don’t have adequate space. We’re missing out on opportunities.”
John Dennery, owner of Dennery’s Restaurant in Jackson, said because civic centers around the country are having financial difficulties, this funding mechanism “would strap our city with the same type of monster.”
“I just don’t understand why our citizenry would want to indebt themselves for that type of construction project when so many other cities around the South have not paid out,” he said. “There are those who obviously feel like the public should pay for this multi-million dollar convention center just to have a kitchen sink.”
Good pointed out that, when preparing for catering a $1,000-a-plate fundraising luncheon for 1,200 people in the Mississippi Coliseum during a recent visit by President George W. Bush, his catering staff had to fashion a makeshift sink.
“If the state wanted to allocate money to put a sink in the coliseum, they could figure out a place to put it,” said Dennery. “When I was chairman of the CVB board in the early 1980s, we were told by so many other CVB operators around the South to stay out of brick and mortar. It’s a money-loser. To me, this is going in the wrong direction.”
Wilson said that, no matter the outcome, “Once the vote is over and the people will have spoken, I hope we can move forward together and get past this.”
Contact MBJ contributing writer Lynne W. Jeter at email@example.com.
BEFORE YOU GO…
… we’d like to ask for your support. More people are reading the Mississippi Business Journal than ever before, but advertising revenues for all conventional media are falling fast. Unlike many, we do not use a pay wall, because we want to continue providing Mississippi’s most comprehensive business news each and every day. But that takes time, money and hard work. We do it because it is important to us … and equally important to you, if you value the flow of trustworthy news and information which have always kept America strong and free for more than 200 years.
If those who read our content will help fund it, we can continue to bring you the very best in news and information. Please consider joining us as a valued member, or if you prefer, make a one-time contribution.Click for more info