Use of Duluth tourism tax under scrutiny

Talk about it

A city task force assigned to cast a critical eye on how Duluth plans to spend nearly $7.5 million in local tourism taxes this year is asking lots of questions, and its members expect answers.

Just ask Visit Duluth — the largest recipient of tourism taxes in the community.

Visit Duluth, an umbrella agency formed to promote tourism throughout the city, will rely on the tourism tax for nearly $1.5 million in funding this year. Last year, it derived about 55 percent of its budget from tourism tax proceeds.

On May 16, Duluth City Attorney Gunnar Johnson sent Visit Duluth an information request on behalf of the task force, asking that it provide a written response by May 27.

On May 27, Visit Duluth President and CEO Terry Mattson informed Johnson that his organization had “yet to complete the extensive list of questions” and that he would like the opportunity to present any information to the task force in person.

Last Tuesday, June 7, at the direction of task force members, Johnson wrote Mattson again, asking for the requested information so that task force members could prepare themselves for a scheduled Friday meeting.

Mattson again begged off, saying: “I have scheduled my entire workweek around having the task force questions and a narrative ready for presentation at 2 p.m. Friday, as requested.” Mattson explained that he had been traveling extensively since receiving the task force’s information request.

On Friday, Mattson and his crew provided a written response a full two weeks after the original deadline had passed.

Tony Bronson, chairman of Visit Duluth’s board of directors, said he probably bears some of the blame for the delay, as he had directed Mattson to focus on a more general list of questions the task force sent to other organizations instead of the more tailored request originally sent to Visit Duluth.

After “a bit of a scramble,” however, Bronson said Visit Duluth responded to both sets of questions in a 200-some page packet hand-delivered to task force members in a three-ring binder Friday afternoon.

“The questions aren’t the problem,” said Mattson, who chalked up the delay to earlier miscommunication. “We believe in accountability and transparency. Every penny that we receive can be accounted for.”

Tourism tax task force member Doug Britton said his concerns weren’t completely allayed.

“It could have been a communication problem, but from a public accountability perspective, the delay still raises a red flag for me,” he said.

Britton also wants time to wade through the written materials received from Visit Duluth on Friday. He and other task force members suspect another meeting with Visit Duluth will be necessary.

Dan Hartman, a city councilor who also serves on the tourism tax task force, said he was pleased with the quality of Visit Duluth’s presentation Friday, but he considers it unfortunate the organization didn’t disclose financial details earlier.

“It’s possible we could have avoided a second meeting with them if we had got the information in advance,” he said.

Hartman said he looks forward to receiving more detailed financial reporting from tourism tax recipients in the future and suggested more thorough oversight was long overdue, considering the tax was first established in 1969.

“Times are tough, and times are changing,” said Sharla Gardner, who also serves on both the City Council and the task force. “It isn’t business as usual anymore for anyone.”

Even though tourism has been a relative bright spot in Duluth’s economy, Gardner said, “An effort is being made to scrutinize everything and see how we can do even better. It isn’t personal. We want Visit Duluth to be there, too.”

The tourism tax task force will meet again Tuesday morning to discuss its review of Visit Duluth’s presentation.

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