Duluth Chamber of Commerce talks tourism tax task force

• Aerial Lift Bridge

From 9 p.m. to 7 a.m., the bridge will lift on demand for all boats. (2009 file / News Tribune)

Talk about it

Members of the Duluth Area Chamber of Commerce met early Tuesday to get a jump on discussions of a new tourism task force created by the Duluth City Council just hours earlier.

The council voted Monday night to create a task force that could guide the city’s use of an anticipated $7.5 million in tourism tax revenues for 2012. The Chamber of Commerce met early the next morning to discuss what that task force might look like and how it should function.

Tony Bronson, regional manager of Grandma’s Restaurant Co. and chairman of Visit Duluth, said he’s optimistic the task force will give voice to people in the tourism industry amid all the competing interests.

“We want some ability to impact decisions,” he said.

The task force will consist of at least three representatives of the tourism industry, three city councilors and one member of the public. The body will not be a decision-making entity but will make recommendations to the city administration and council.

Bronson said he was encouraged not only that the City Council approved the idea of a task force but that it also put the brakes on a proposal by Councilor Todd Fedora to set aside at least $50,000 per year for capital investments in publicly owned tourism attractions. Bronson wants the task force to take a comprehensive look at expenditures before placing any earmarks on 2012 tax revenues.

Nevertheless, Fedora continued to stand behind his idea of a set-aside for upkeep of the attractions that keep Duluth a vibrant tourist destination. The resistance he encountered took Fedora aback.

“I was a bit surprised, because I can think of no better or more prudent way to invest a portion of the tourism tax,” he said, pointing out that $50,000 per year would represent just 0.7 percent of tourism tax proceeds.

But even small designated slivers of the tourism tax can add up to significant sums of money that can’t be put to other uses, Bronson said.

Karen Pionk, general manager of the Sheraton Hotel in Duluth and also a member of Visit Duluth, noted that allocations have a way of accreting over time.

“I’ve kind of learned that when something goes in, it stays in,” she said.

Pionk also questioned why nearly 10 percent of the tourism taxes are funneled back into the city’s general fund.

Dave Montgomery, Duluth’s chief administrative officer, defended the allocation.

“Tourism is a major component of Duluth’s economy, and a significant amount of city services are required just because of the number of people coming here from out of town,” Montgomery said.

He said out-of-town traffic takes a toll on city infrastructure and pointed out that the city has held the share of money it receives from the tourism tax flat in recent years.

“Our city departments are spending a large amount of time in support of this industry,” he said.

Montgomery also pointed out that city residents generate a significant share of tourism taxes themselves by going out to eat or engaging in other activities.

Bronson said tourism professionals on the task force will provide the city with a useful perspective. They routinely consider return on investment when considering where to focus their attention, he said, and they can use this same lens to determine where tourism taxes should flow for maximum economic benefit.

Fedora said he hopes there will be a broad representation of views represented on the task force.

Montgomery said he and Mayor Don Ness believe that if the council is going to set up a task force, it should contain as broad a representation of the community as possible.

“It should not be narrowly populated in such a way that it could predetermine the outcome,” he said.

Montgomery also said he hopes task force members won’t dwell solely on how the tourism taxes should be divided among existing stakeholders but instead will step back and look at what they hope to achieve with that money and how to measure success.

“Done right, this could be an extremely interesting and useful conversation for our community to have,” he said.

To get involved

The Duluth City Council is looking for volunteers to serve on Duluth’s soon-to-be-formed Tourism Task Force.

The body will include people from the tourism industry, residents not involved in tourism and three city councilors. The task force’s goal is to clarify the role of the city’s tourism taxes and recommend how they be allocated.

Any interested Duluth resident should contact City Council President Sharla Gardner at sgardner@duluthmn.gov. Alternatively, applicants may send a brief background statement and an explanation of why they wish to serve to the Duluth City Clerk’s Office, 414 W. First St., Duluth City Hall Room 330, Duluth, MN 55802.

The deadline for applications is March 10.

Tags: duluth chamber, news, duluth, business, money