Tourism: Facts, Assumptions, Myths

Brown County Memories – Andy Rogers Recalls  About Andy Rogers – “He stands at the center of Nashville’s dogged attempt to satisfy a tourist industry while retaining its soul—the thing that people have lost in their own communities, the reason they come to visit in the first place.

Terms

  • Fact. An event, item of information, or state of affairs existing, observed, or known to have happened, and which is confirmed or validated to such an extent that it is considered ‘reality.’
  • Assumption. A  thing that is accepted as true or as certain to happen, without proof.
  • Myth an unfounded or false notion.

Question:  How much tourism is too much?   An issue that is addressed throughout the world. (google the question)

Jan 28, 2019. Brown County Matters – Facebook Post on BCD’s Jan 24 article (below).

  • Presentation – 2017 Economic Impact of Tourism in Brown County developed by Rockport Analytics. What the report and article in the Brown County Democrat  do not provide is context.- Jan 24, 2019, BCD. Economic impact study finds tourism growing
  • The study identifies that tourism is growing and tourists spent $42.7 million which is good news for the owners of business establishments that cater to tourists. The report also states: “For every $67,102 spent on tourism in Brown County in 2017 supported a job resulting in an average wage of $19,259 in gross wages” and … “ Total Traveler Spending supported 636 Jobs. “
    • Jobs within the county by Industry
      • Government:  (county and state): 859
      • Tourism: 543.
      • Other industries:  1,840.
      • Total jobs within the county: 3,242.
      • Total individuals employed (inside and outside the county): 7,500. (census data).
  • The county is funded primarily by income and property tax. The total taxable income – “economic impact” by county citizens is approximately $260 million (1).
    • (1) The county income tax levy generated 6.5 million in revenue. The county income tax rate is 2.5234%. (6.5 million/.025=260 million).
      • In addition to wages, taxable income also includes income derived from investments and pensions
      • The 6.5 million was obtained from the presentation provided by the RDC that was briefed to the public. See slide 26 – “How are our income & property taxes allocated?”
      • State taxable wages are derived from the state allowed deduction and credits from the federal adjusted gross wages (AGI).
    • Average employee wages in tourism ($19-22K) are among the lowest of all the industries in the county and region.
    • United Way –  ALICE Brown County Report — Information on households that earn more than the federal poverty level but less than the basic cost of living for the county. Nashville at 54% has the highest score compared to the townships and conservancy.
    • Federal Adj. Gross Income in 2016 (economic impact) reported on state tax returns for 6,825 county residents was $359 million.  (Ref: Stats Indiana)
    •  Assessed property values (from which property taxes are derived), increased in all areas of the county from 7% to 16% throughout the county. The EXCEPTION being Nashville which declined by 1%.

Jan 24, 2019, BCDEconomic impact study finds tourism growing, by Suzanna Couch. If tourism in Brown County did not exist, in theory, each household would have to pay an additional $613 per year in taxes to make up the money it brings into the community.

  • In “theory,” if cows had wings, they could fly  🙂
  • The article includes a summary presented to the CVC by Jane Ellis that highlights the benefits to the owners of the businesses that cater to tourists.

 Tourism – Summary of Key Points

  • The State of Indiana promotes tourism which generates revenue from sales taxes. County taxpayers absorb the cost of services and infrastructure related expenses.
  • The State subsides the tourism industry by allowing Brown County to collect a 5% innkeeper’s tax that has to be used to promote more tourism.
  • Revenue from property taxes is derived from assessed values.  Since 2011, the adjusted net assessed values have increased in all taxing areas (townships, conservancies) from 7-16%.  The exception is Nashville where assessed values declined by 1%.
  • Economic impact studies commissioned by the State and County “estimate” that tourism can result in positive economic impacts.  These studies do not include any adverse effects from tourism that include the impact on local culture, crime, congestion, increased infrastructure costs, emergency services,  etc.
  • Andy Rogers – Vision for a right balance of tourism within Brown County
    • People say, ‘Well, we can’t change.’ But we can change and still retain some of the flavor of Brown County. We need people to live here. I’m in the tourist business but we don’t want to turn this town over to the tourists. You can go to Gatlinburg if you want to see what happens to a town that turns it all over to business. It’s not a town anymore—it’s a shopping center. We need people here. This town needs to be alive.” 
    • “We don’t need to be slick and highly commercial. We need to be more country. Country is what we sell…. We need to maintain that. Once you destroy that, it won’t come back.” 
    • County tax policy is high income (5th highest in the State) and low property. You lose “country”, and you most likely lose residents which shifts the tax burden on to fewer people.
  • Validation of the assumptions supporting estimates as to economic impact would be reflected in revenue from income and property taxes.
  • A five-member Convention Visitors Commission (CVC) is established to manage the revenue from the innkeeper’s tax.  The CVC budget has to be reviewed and approved by the county council.  The CVC contracts with the Convention Visitors Burea (CVB) to manage the funds.
  • Three of the five members of the CVC must be innkeepers.  Justification – Innkeepers collect the tax and would favor promotions that may lead to more overnight stays.
  • Owners of tourism establishments benefit from investments of the revenue from the innkeeper’s tax through sales and increases in the asset values of their establishments.
  • The county is funded primarily by income and property tax.  The county collects no income taxes if owners and employees live outside the county.
  • Commercial properties including tourism business in Brown County, are not experiencing the annual increases in property taxes that are being experienced by residential property owners.  A contributing factor is that the sales of commercial properties are not at the volume where an increase in market value can be established and other assessment options are required.
  • The sale of acreage for the Maple Leaf Music Venue sold for $145,000 an acre. This sale did not result in an increase in the assessed value of surrounding commercial properties. It is not included in assessing market trends,
  • County citizens and taxpayers pick up the inconvenience and infrastructure costs associated with more visitors to include congestion, roads, police and emergency services.
  • We will always have tourism that is “perceived” to be considered an asset for Nashville but can be a liability for the county (see Andy Rogers vision for tourism).

Additional Information:  

  • An excellent report on Brown County Economics.  BCD Report: Local taxes, job options need further scrutiny by Sara Clifford/Brown County Democrat, Tuesday, May 16, 2017
  • Sep 20, 2017, GUEST COLUMN: A study of tourism and economic sustainability By Tim Clark. Economic impact studies of tourism in Indiana and Brown County reinforce the benefits of sustaining a tourism industry. However, tourism, by itself, has not and cannot provide a sustainable economic future for Brown County. Further, too much tourism can have detrimental effects on the attributes that have attracted pioneers, artists, residents and visitors to Brown County since 1836.
  • Census Data- County Employment by Sectors: 20181103 Employment Data Census Bureau
  • Future of Local Economy – Includes articles and independent results from studies
  • United Way –  ALICE Brown County Report Information on households that earn more than the federal poverty level but less than the basic cost of living for the county. Nashville at 54% has the highest score compared to the townships and conservancy.

 

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