letter to the editor: anti occupancy tax

Forty years ago our Founders set up our little Town against seemingly insurmountable obstacles. It was not too novel an idea for those times: a small, agile, accountable, pay-as-you-go government run by the people.

It was, whether intentionally or inadvertently, modeled after what Alexis de Tocqueville described in 1835 as the genius of America. It has succeeded perhaps beyond our founders’ fondest hopes, and today enjoys an enviable quality of life.

We have better roads, sidewalks, parks and amenities, traffic management, street lights, schools and public safety, less crime, a more pleasing aesthetic and much more because of their vision.

I have lived here most of Farragut’s 40 years, have known all of its mayors and I have served in Town government in one capacity or another for about half that time. I own a rent house in Kingston where I pay over $2,000/year more in taxes and services than I do in Farragut for a house not nearly as nice as my home here. That money saved from government allows our citizens to better maintain their homes, support our schools, etc.

Since Farragut’s founding, our favorable tax structure provided the significant competitive advantage that put us on the map as a hospitality destination with nine fine hotels with 720 rooms in a wide range of prices. These in turn have allowed our restaurants, fuel centers, convenience stores and other related businesses to thrive, and together they have created a dynamic market that brought other businesses and industries to Town to support our community and enjoy its benefits.

Now we find ourselves part of a regional shopping and hospitality destination and our sales tax-based economy has thrived and grown to the point that it can now support expanding our parks, preserving our historic buildings, opening a wonderful new community center, etc. And to a large degree our hotel owners are the unsung heroes of Farragut’s enviable success.

Beyond these happy results, our tax structure also provides us the leverage to require higher architectural aesthetics, better signage, better energy efficiency and higher safety standards, which in any other community would be deal-breakers, but which far-sighted developers willingly pay because the tax structure makes it feasible in the long run.

Now all that is about to change. Thursday, 1-9-2020, your Board of Mayor and Aldermen voted 4 to 1 to enact a Hotel/Motel Tax of 3 percent, which will effectively strip our hotels of their competitive advantage and immediately reduce sales tax revenues from them and all the other businesses that thrive because of them.

Basic economics, common sense and numerous studies prove this result inevitable.

What was shot down three times in the past as a bad idea by more prudent Boards is now nothing short of economic suicide! Anyone traveling the Interstates will readily observe seven new hotels coming online in the area with some 870 new rooms to compete with ours.

These are scary times for what should be one of our most treasured assets, making this the worst possible time to saddle and hamstring them with this reckless and unwarranted tax.

The irony is that this BOMA wants to do this to promote “tourism” in a Town with no real tourist attractions and no plans to build any. That would be bad enough, but as justification they cite the mantra of actual tourist destinations that for every dollar spent on tourism they will reap multiple dollars in return.

This flimsy argument is immediately shot down by the obvious question that, if it will support itself, why on earth would you need a separate revenue stream to fund it?

In short, I urge all Farragut residents to go online at Farragut.org and watch the video of the meeting, draw their own conclusions and then contact this BOMA and let them know that if they really believe in this “tourism” initiative we expect them go about it in the proven and responsible way and provide a budget line item for it, and some metrics to measure its success, and then let it sink or swim on its own merits.

Just please don’t destroy one of our main economic engines on the experiment.

The following is BOMA contact information:

Mayor Ron Williams rwilliams@townoffarragut.org

Vice Mayor Louise Povlin lpovlin@townoffarragut.org

Alderman Ron Pinchok rpinchok@townoffarragut.org

Alderman Scott Meyer smeyer@townoffarragut.org

Alderman Drew Burnette dburnette@townoffarragut.org

Bob Markli

Former Farragut alderman