Monday, May 2, 2011
Auditorium district would hurt private sector options.
By Wayne Hoffman
This month, voters in Nampa and Idaho Falls will be asked to create new government bureaucracies called auditorium districts. Auditorium districts collect taxes of up to 5 percent from hotel guests to fund local convention centers and to market those facilities in an effort to attract more tourists and other out-of-towners.
Supporters of such tax districts contend it’s a win-win-win-win-win-win scenario, because the people paying the tax are folks who, for the most part, don’t live here. They’re asking voters to approve a tax that you’re very likely to never have to pay.
That’s not always the case, and this is not a victimless crime.
The defenders of auditorium district taxes are opting to create a new taxing district and companion government bureaucracy despite less expensive, less intrusive options.
For example, there’s nothing prohibiting local hoteliers, restaurateurs, chambers of commerce and other businesses from using their own resources, individually or collectively, to market the community or their own industries. If they really wanted to, those businesses could do it tomorrow in a way that does not require the creation of a new taxing district.
They are instead opting to use the power of the government to extract wealth from people because they can and because it’s easiest.
In creating a taxing district, the government will collect money that otherwise would be spent in the private sector. This is money that might have gone into the coffers of local restaurants, coffee shops, movie theaters and other establishments. Instead, the money will be used to fund a government program, a government facility and government employees.
Make no mistake that local businesses will be deprived the money collected through an auditorium district tax. Travelers will make decisions on how to spend a finite amount of money; a 5 percent bed tax will give those travelers less money to spend, and they’ll make decisions accordingly.
Local businesses will do without, but the one that won’t do without — the chief beneficiary — will be the newly-created taxing district, which will grow with the size of the tax collections.
This will affect me, too. When I bring guests to town, I will pay the 5 percent hotel tax. That $5 on a $100 hotel room is money that I would spend in the community at local businesses. Instead, that money will go to the government.
Unlike government, I can’t “create” another $5 to go into my coffers. I’ll just have $5 less to go into the economy, $5 less to spend at local businesses or put into payroll. Or maybe I’ll decide to bring one fewer guest to the state. Remember, a good way to discourage an economic activity is to tax it.
Idahoans are constantly being asked to approve one tax or another, with claims that great, great good will come from either the creation of a tax or increase in an existing tax.
There is nothing philanthropic in a government tax scheme that claims money for a government bureaucracy at the expense of the private sector. Regardless of how it is couched, that is exactly what an auditorium district tax will do for the communities of Nampa and Idaho Falls.
(Editor note: Let's not forget the folly of the Idaho Center and the ongoing costs of this monstrocity to the taxpayer's of Nampa to the tune of around $600K this year.)
Posted by Paul Alldredge at 11:02 AM