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Special election on Tuesday to decide on hotel tax increase in Oklahoma City

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Oklahoma City voters will decide Tuesday whether to increase the local hotel occupancy tax to generate more funds to boost the city’s tourism industry.

If passed, the tax would rise from the current 5.50% to 9.25%, effective October 1. The tax increase would affect people who stay in a hotel or rent shared accommodations such as Airbnbs in Oklahoma City.

Supporters of the hotel tax increase, including Oklahoma City Mayor David Holt, say the 3.5 percent increase in funding is critical to attracting more visitors to the city through increased marketing efforts and support for major events.

“A lot of people don’t realize that behind the scenes, when we talk about big events, there’s often some kind of incentive attached to it, just like with economic development,” Holt told reporters shortly after early voting on Thursday. “You have to have resources to do that, and resources that are on par with comparable cities.”

Oklahoma City residents last considered raising the hotel tax in December 2004. That proposal passed with an approval rating of 89.4%. Holt believes that this unusually high approval rating is due to the fact that the tax is paid almost entirely by visitors to the city.

“Visitors are kind of the best taxpayers there are: They come here, they don’t use our city services much, but they pay sales tax and hotel tax and they’re a major contributor to our core services,” Holt said. “Police, fire, roads – visitors pay a big part of that, and that’s why we want to attract more visitors. We’ve built a city that can handle it, but we need to advertise.”

What would change about hotel taxes in OKC if Tuesday’s measure passes?

The hotel tax increase would be added to the state sales tax of 4.5%, the current hotel fees of 5.5% and the city sales tax of 4.125%, resulting in a total room tax of 17.875%. The total tax currently levied on hotel rooms is 14.13%.

Tuesday’s vote could also change how hotel tax revenue is used. Seventy-five percent of it would go to promoting tourism and 13.3 percent to event sponsorships. About 6.7 percent would also go to fund capital improvements at the OKC Fairgrounds and 5 percent would go to improvements at the MAPS 3-branded Oklahoma City Convention Center.

Currently, 55 percent of the hotel tax goes to the exhibition center, 36 percent goes directly to promoting tourism and 9 percent goes to event sponsorship.

More: Oklahoma City voters decide on hotel/motel tax: “This is pretty much the best deal there is” | Mayor

Zac Craig, president of Visit OKC, said tourism has become an important part of the local economy thanks to the city’s MAPS initiatives, but he also noted that more funding is needed to ramp up promotional efforts and fill hotel rooms, restaurants and event venues.

“OKC has invested billions in world-class infrastructure and amenities, but we must also increase our destination marketing efforts as we compete with larger cities for leisure, convention and sports visitors,” Craig said in a statement.

Craig and Holt said local hoteliers support the tax increase. If voters approve it, the tax would still be lower than those in comparable cities such as Kansas City, San Antonio and Memphis.

“The hoteliers … are really the only group that would be particularly sensitive to this because they would potentially be concerned about the impact on their business and their competitiveness,” Holt said. “But because the tax rate is already so low, which they completely understand, they don’t think it hurts competitiveness and they see the benefit that these funds bring to their business.”

More: Proposed hotel tax increase in OKC now goes to vote

Support and criticism of the OKC hotel tax increase

But another group has raised concerns in recent weeks about the potential impact of the hotel tax increase. The Homeless Alliance, a nonprofit that provides support to the city’s homeless population, is concerned about how the tax increase could affect homeless people, who use local hotel rooms much more frequently than the average resident.

“As a service provider, we know how real the hotel cycle is for our homeless neighbors,” said Meghan Mueller, CEO of the Homeless Alliance, in a July 30 statement. “Hotel rooms are often a short-term option for people who have no other place to stay, but they can eat into what little income the individual can put toward housing, leaving them unable to even afford a security deposit and first month’s rent on an apartment.”

“Increased fees for hotel stays could further reinforce this vicious cycle of people being stuck in hotels and not having the means to move out,” Mueller concluded.

In another statement Friday, Mueller stood by her previous comments but said the nonprofit has since met with the Greater Oklahoma City Chamber, an organization that has run high-profile campaigns for various local initiatives and is advocating for the tax increase.

“We are pleased to report that we have shared these concerns with the Chamber of Commerce and found common ground,” she said.

Spokespeople for the PromoteOKC campaign told The Oklahoman on Friday: “The best way for our community to improve services for the homeless is to raise more tax dollars, create new jobs and grow our economy so we can provide them with the services they need.”

At least one Oklahoma City City Council member said her issues with the proposed tax increase remain. In a thread explaining the reasons for her decision, on X (the site formerly known as Twitter)6th District Councilwoman JoBeth Hamon said she would vote no.

“I voted to put it to a vote and I regret a little that I didn’t make it a stronger issue at the time. But after thinking about it again, it seemed to me that the matter came before the council in a rush and not very well thought out manner,” Hamon said.

When the proposed ordinance was introduced in May, a debate ensued among council members, with some even questioning why capital improvements for the convention center and fairgrounds were being given additional funding through the tax increase while other projects were not given similar priority.

Hamon claims the council has not been provided with much information about how much of the hotel tax is actually collected from visitors to the city and from locals who are housing-starved and living in motels, but she acknowledged that collecting such data would likely be problematic anyway.

“Also, I think we could do a better job of making sure our tourism economy creates really good, reliable jobs for locals and does more to promote our business districts,” Hamon said. “When this idea was presented to us, the (2028) Olympics was not an issue that most of the council knew about at the time, but I would have preferred if we had known that was an issue, given the (amount of) local funding we are supposed to provide to make the facilities Olympic-ready.”

Ultimately, Hamon said, she believes a more thorough discussion about the use of the tax increases “beyond a mere request” could have been had with the Chamber of Commerce’s Visit OKC division, also known as the Convention and Visitors Bureau.

“I support the concept of a hotel/motel tax that can help tourists pay for things that support the tourism economy,” Hamon said, “but I think this proposal could have been more thoughtful in its implementation and it is worth telling the City Council (and) the CVB to rethink how they administer this tax.”

Polls will be open from 7 a.m. to 7 p.m. on Tuesday. On that day, EMBARK buses, RAPID and OKC streetcars will be free on all routes to make it easier for registered voters to get to the polls.

By Bronte

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