A proposed 3 percent lodging tax increase could make Columbia’s airport more competitive and increase economic expansion, according to a recent City Council report.
Mayor Bob McDavid supports the measure and sees the additional revenue as a means to fund necessary airport expansions, according to the report.
The expansion would increase the south terminals to the airport, triple the size of the lobby and add a restaurant and additional screening areas.
The national average lodging tax as of 2008 was 13 percent, according to the report, and the current lodging tax in Columbia is set at 4 percent, which generates about $2 million a year in revenue.
The proposed increase is aimed at generating revenue because there is currently no funding available for the airport expansions McDavid sees as vital to continuing economic growth in Columbia, according to the report.
The tax increase would generate an additional $1.5 million per year that could be earmarked for the airport expansion, which will cost about $17 million total, according to the report.
Toni Messina, City of Columbia Communications director, said the proposal does not necessarily mean the lodging tax will increase anytime soon, but will enter into the normal legislative process as any other bill does.
“The council agreed only to move forward to seek legislative approval…there would be a maximum of 7 percent tax, but possibly 5 percent or 6 percent, nothing is decided at this point,” Messina said.
The proposal was unanimously approved by City Council members and will be forwarded to the state for potential legislation, Messina said.
The lodging tax in other Missouri areas reflects a higher amount than in Columbia. In Jefferson City, the lodging tax is 7 percent, according to the city’s website.
Although the idea is to fund airport expansion, some City Council members think the money could be used for other city needs, such as transportation.
“When we were facing the possible transit cuts this summer, and fee increases, we were looking into additional revenue for these things, and this could be a possibility,” Ward 6 Councilwoman Barbara Hoppe said.
Amy Schneider, director of the Columbia Conventions and Visitors Bureau, said there is potential for business to increase as a result of the airport expansion.
In 2010, Columbia was passed over as a conference location for Safe Routes to School, a national convention promoting community and school involvement because the airport was deemed too small for such large groups, Schneider said.
A reduction in occupancy rates in local hotels might also be a concern, which could be driven in part by conventions choosing areas other than Columbia. This argument, however, does not mean that conventions or even visitors will stop coming to Columbia, Messina said.
“There are a lot of factors that contribute to whether an organization will choose a particular meeting convention,” she said.
At the Stoney Creek Inn, a single Friday night stay with a deluxe king bed costs $132.51 with the current tax rate, according to Stoney Creek’s website. The new cost, assuming the potential tax increase, would be $136.08.
This amount, which McDavid argues is necessary to continue being competitive economically, might cause pain in the travel industry, but could also lead to longer-term viability from a business perspective.
“I think it has potential and possibilities, but at this point I’m just keeping an open mind and wanting to talk with everyone,” Hoppe said.