Travel Industry Association of American Press Release

Date: December 4, 1996
Contact: Michael Pina (202) 408-2137

17 Cities Sock It To Travelers To Pay For Stadiums

WASHINGTON, DC--Seventeen U.S. cities either are considering or have placed taxes on travelers to pay for building a new stadium or arena even though only 5 percent of all trips in 1995 included a sporting event on the trip itinerary, according the Travel and Tourism Government Affairs Council (GAC), the Travel Industry Association of America's affiliate.

"Taxing travelers to pay for sports facilities is the rage. Cities are socking it to travelers either through car rental taxes or hotel taxes--regardless of whether they attend a sports event," explained GAC Executive Director Aubrey King. The customer
profile of America's major professional sports venues is largely local residents. The only reason visitors are being asked to bear a disproportionate burden of the funding for stadiums is that they don't vote in your district. The travel and tourism industry does not object to being taxed, but we do object strongly to being taxed unfairly."

Noting the trend, the Council's board recently voted to oppose formally all taxes placed on travelers to finance sports venues. The trend has developed over the past few years as an increasing number of U.S. cities strive to retain or attract professional
sports franchises. In most instances where these cities are either renovating existing facilities or building new ones, a public financing component exists. In nearly every case thus far, revenue from hotel occupancy or auto rentals is used to finance the
public share of sports facilities. (See attached list)

"Some stadium backers are quick to point out that arenas, domed stadiums and even open-air stadiums can also be used for large meetings and conventions. Still, these facilities are being built primarily for team sports and far less so for any particular
travel and tourism purpose," King pointed out.

Unfortunately for travelers, these new taxes are just one more added to the long list of taxes they already pay. The federal airline ticket tax is 10 percent plus airport passenger facility charges of $3 at most of the top 50 U.S. destinations. Gas taxes
cost travelers on average an extra 40 cents a gallon. Restaurants average 7.26 percent. Hotel taxes lead the rates at 12 percent.

Auto rental taxes are more complicated but often very high. The base auto rental tax rate averages 8.24 percent, but most cities tack on many extra taxes to the base rate. For instance, almost 20 cities add surcharges averaging either $2.00 a day or $2.45 per rental. Twenty-eight cities charge a percentage fee for renting cars off the airport grounds, averaging an additional 7.11 percent. Others assess a flat off-airport fee that average an extra $2.61 per rental.

"All told, unfair travel taxes drive up the average cost of traveling significantly, and in many areas, threaten to keep travelers away. Placing the burden of funding new stadiums on travelers is one more sad example," he added.

Cities Either Using, or Considering, Travel Tax Revenue to Support Sports Facilities:

Anaheim, California - A 1% hotel occupancy tax is used to finance Arrowhead Pond, home of the NHL Mighty Ducks.

Atlanta, Georgia - Atlanta was successful in passing legislation at the state level allowing Atlanta to charge a 3% car rental surcharge to finance a new downtown arena for the NBA Atlanta Hawks. Other Georgia cities such as Savannah and Marietta
are now following suit. Also, nearly half of the 7% local tax on hotel stays is used to finance the Georgia Dome, home of the NFL Atlanta Falcons.

Broward County, Florida - An additional 2% hotel tax was approved this year in order to fund a new arena for the NHL Florida Panthers.

Buffalo, New York - Crossroads Arena, to be completed next year and used by the NHL Buffalo Sabres, will be partially financed by the county hotel occupancy tax.

Chicago, Illinois - Comiskey Park, home of the MLB Chicago White Sox, is partially financed with a 2% hotel occupancy tax. Additional tourism taxes might be used to finance a new stadium for the NFL Chicago Bears.

Detroit, Michigan - In November, voters in Wayne County approved an additional 1% hotel tax and 2% auto rental tax that will partially finance new side-by-side, downtown stadiums for the NFL Lions and MLB Tigers. These taxes will go into effect
on January 1, 1997.

Houston, Texas - Harris County voters narrowly approved a plan in November that prohibits property taxes from being used to finance a new baseball stadium for the Houston Astros, but lists among other possible revenue sources a local 5% auto rental
tax. Like other Texas cities seeking new sports facilities, Houston will very likely seek approval of a plan in the Texas legislature next year that will permit them to levy local car rental taxes.

Jacksonville, Florida - A 2% portion of the hotel tax is used to finance the Gator Bowl, home of the NFL Jacksonville Jaguars.

Miami, Florida - Of the 12.5% total hotel tax, a 2.3% portion is used to fund various sports facilities in Dade County. There are also plans to use an unspecified portion of the 3% convention development tax charged on hotel stays to help finance a new
arena for the NBA Miami Heat.

New Orleans, Louisiana - A 4% stadium and exposition district tax is charged on hotel stays to finance the Superdome, home of the NFL New Orleans Saints.

Orlando, Florida - A 1% portion of the hotel tax is used to finance the Orlando Arena, home of the NBA Orlando Magic. Additionally, Orange County approved a 1% levy on hotels to raise money in order lure and house a new MLB team, which has never happened. The revenue is reportedly being used on sports and recreation facilities in
the county.

Phoenix, Arizona - America West Arena, home of the NBA Phoenix Suns, was partially financed with additional taxes on lodging (1%) and car rentals (2%). Also, Maricopa County charges a $2.50 surcharge on each car rental to support baseball spring training facilities.

San Antonio, Texas - There is much discussion about pursuing legislation next year to levy a car rental tax to finance a new arena for the NBA San Antonio Spurs. Several other Texas cities are eyeing this closely.

Seattle, Washington - A new 2% car rental surcharge will help finance the construction of a new baseball stadium for the Seattle Mariners.

Tampa, Florida - Unspecified portion of the 5% tourist development tax charged on hotel stays is used to finance the Ice Palace, home to the NHL Tampa Bay Lightning. Local officials attempted to pass legislation at the state level to charge a new 5% car rental tax in order to help finance a new stadium for the NFL Tampa Bay Buccaneers. This effort failed, and Tampa Bay voters recently approved a half-cent local sales tax increase for a new stadium and other government programs.

Tucson, Arizona - Pima County charges $3.50 on each car rental to support rehabilitation of a baseball spring training stadium and related facilities.

West Palm Beach, Florida - A portion of the 4% local tourist development tax charged on hotel stays is used to finance a local sports commission and unspecified sports facilities, at approximately $3.3 million annually.

SOURCE: The Travel and Tourism Government Affairs Council, the affiliate of the Travel Industry Association of America.

TIA is the national, non-profit organization representing all components of the $541 billion travel industry. TIA's mission is to represent the whole of the U.S. travel industry to promote and facilitate increased travel to and within the United States.

Travel Industry Association of America
1100 New York Avenue, NW, Suite 450, Washington, DC 20005-3934
202-408-8422, Fax 202-408-1255
 

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