Farragut Alderman Robert “Bob” Markli, Town mayoral candiddate, details his opposition to a Town Hotel/Motel Tax. Alderman Ron Williams, Markli’s mayoral opponent, will be offered equal space to share his Hotel/Motel tax views in an upcoming issue.
The question your Board of Mayor and Aldermen address today (Thursday, April 26) represents a tectonic shift in the way Farragut is run as it prepares to cast off moorings once firmly anchored to the bedrock principles of fairness, independence, lean responsive government, fiscal responsibility, transparency and low taxes espoused by founders like Ralph and Marianne McGill, Eric Johnson, Betty Dick and many others.
From the outset they determined that Farragut’s primary functions, maintenance of it roads and infrastructure and administration of its ordinances and codes, could be provided through revenues available from state shared sales and property taxes, beer and liquor tax, etc. without need for additional taxes; a revolutionary idea that worked so well we became the envy of our neighbors and garnered statewide and even national attention!
But something has changed, and suddenly your Board has embraced the idea of a Hotel/Motel Tax, moving with urgent swiftness to enact it. No matter that no one has demonstrated a need for this new tax. Our revenues are steadily increasing and our surplus is as large as ever. We have no debt and all our capital improvement projects are fully funded. Why this urgency? The only rationale offered so far is “Everyone else is doing it.” And they hold up for a glowing example the city of O’Fallon, Illinois, the failing state with the second highest property taxes in the nation, nearly double the national average!
But Farragut is not like everyone else, thank God. And we did not get where we are by doing what everyone else does. In fact, we got where we are by not doing what everyone else is does!
So we must rightly ask, why has there been zero evidence presented to show how this will benefit the Town or increase revenues in the long run? Has no one considered the obvious fact that our favorable tax structure of no Property Tax or Hotel/Motel Tax has provided the magnet for the construction of so many fine hotels in our Town that we have become the de facto hospitality center for the region? And does not the fact that our sales tax revenues have continued to increase prove that these establishments have recognized what we persistently ignore; I-40/75 is a river of gold flowing through Town every day, “Acres of Diamonds” in our own backyard, and that they are the only ones with a consistent plan to market to that asset? Why are we not listening when all nine of our Town hotel owners tell us this tax will hurt them and us?
In our headlong rush to penalize the one industry that may be the key to our long-term prosperity, we may be killing the goose that laid the golden egg. Any student of economics knows that you tax nuisances and subsidize beneficiaries. Prudence demands caution on this manifestly discriminatory tax which will damage our business-friendly credibility while diminishing revenues in the long run. No action should be taken by this Lame Duck Board until the new Mayor and Board are elected and at a minimum they:
(1) charge our Economic Development Advisory Committee with an in-depth evaluation of this issue and publishing a report of their findings to the Board and the Town.
(2) Charge the two business advocacy groups funded by the Town; Farragut Business Alliance and Farragut-West Knox Chamber of Commerce, with consulting their respective memberships and especially the hotel industry representatives and advocacy groups, and likewise publishing their findings.
(3) Put this question to the citizens by referendum once they have had opportunity to review all of the above.