The hotel occupancy tax (HOT) is sometimes called a “waste tax” because it can’t be spent on much more than fluff. Here’s another example of that.
KXAN launched an investigation recently into money spent by Visit Austin, a private 501(c)6 that markets the city internationally and “receives a substantial portion of its revenue from the City of Austin”. It found that the group “shelled out nearly half a million tax dollars on entertainment, alcohol and gifts in the past two years,” including spending thousands on concerts, catered parties, bar tabs, and expensive dinners for employees.
Some of the most shocking expenditures came in the form of big name concerts—in other cities. Visit Austin spent over $30,000 on Lady Gaga, Dixie Chicks, Adele, Beyoncé, and Paul McCartney concerts in cities like San Francisco, Boston, Chicago, and Washington D.C., according to KXAN.
City council members of every political stripe believed these gross misuses of funds required immediate attention. After a lengthy hearing on Thursday, the Council unanimously voted to “divert millions of dollars generated by hotel occupancy taxes from the Austin Convention Center and Visit Austin.” The council now requires that Visit Austin pay for its bar tabs with its privately funded money from now on, and in addition may only promote local Austin musicians.
Even still, all of this, again, highlights the need for HOT reform in the next legislative session to guard against waste, fraud, and abuse.
How much did Visit Austin receive from the City of Austin in FY 2016? See answer below!
Source: Comprehensive Annual Financial Report for FY 2016