Leveraging Revenue – Innkeepers Tax

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Updated: Jan 30, 2024
bcmc
A new source of revenue for the county to cover public safety and other critical infrastructure needs?
Jan 30, 2024. Updated revenue numbers from the Treasurers Office:
    • 2021 $1,221,412.15
    • 2022 $1,161858.25
    • 2023 $1,327512.15
  • Revenue from the innkeeper’s tax generated over 2 million dollars in 2023.   (Source: Brown County Treasurer)
  • 2017: $829,687.66
  •  2018: $865,890.34
  • 2019: $891,179.53
  • 2020: 821,438.58
  • 2021: 1,674,749.91
  • 2022:  1,869,271.87
  • 2023:  2,371,314.19

o.  More money for the county? If more of the revenue was used to pay the operating expenses of the Music Center, and if 100% of excess profits were returned to the county, the county would have a needed source of revenue to deal with emerging issues.   

    • o. Do any Indiana statute restrict how “profits” from “investments” (Music Center) can be spent?
    • o. The county is not reimbursed for the expenses associated with tourism which would include police and emergency services to the State Park and the costs of any prosecution of offenses from arrests through sentencing, incarceration, and probation.

Summary – Key Points

o. Revenue from the innkeeper tax was used as collateral by the county to build and operate the Music Center. Before the Music Center, the revenue was passed from the Convention Visitors Commission (CVC) to the Convention Visitors Bureau (CVB).  No performance-related reports were publically shared with the commissioners or council by the CVB nor are reports required by statute (yet).

The county was eligible to start collecting the innkeepers’ tax in 1984.

2022 Indiana Code Title 6. Taxation Article 9. Innkeeper’s Taxes; Other Local Taxes
Chapter 14. Brown County Innkeeper’s Tax  Universal Citation: IN Code § 6-9-14-4 (2022):

    • Sec. 4. All expenses of the commission shall be paid from the fund required by section 7 of this chapter. The commission shall annually prepare a budget taking into consideration the recommendations made by a not-for-profit corporation qualifying under section 3 of this chapter and shall submit it to the county council for its review and approval. No expenditure shall be made unless it is pursuant to an appropriation made by the county council in the manner provided by law.

    • 2024 CVC Proposed Budget  –  “approved” by the county council – 3 line items.
      • Loan Payment: $200K (total amount due around $554, 698?). Balance paid from ticket sales vs revenue from the innkeepers’ tax.
      • Passed to CVB: $654,500.
      • CVB – Other: $475,500

o. Per an administrative agreement, 75% of any excess profits (if legal) are to be given to the Community Foundation and only 25% to county government/citizens.

o. Taxpayer Subsidies. Due to COVID, the Music Center received subsidies of around $2.7 million in grants from the federal government and $239K from county taxpayers.

o. Another agreement  (not approved by the council or commissioners) was a “Save your Seat” program where customers could pay a premium to reserve a seat and this money would be “passed-through” to the Foundation which was claiming it would be tax deductible. The Music Center (Maple Leaf)  Management Group provided $38,825.50 to the foundation from this program.  This arrangement was discontinued by the Foundation.

o. The innkeeper’s tax revenue must be used to promote tourism. There may be over 100 categories of “tourism” listed on Wikipedia.

o. The county council is responsible for reviewing and approving how the money from the innkeeper’s tax will be spent but has always taken a hands-off approach.

o. BCMC (Maple Leaf) Management Group.  Commissioner Jerry Pittman and Councilman Darren Byrd serve on the Music Center (Maple Leaf) Management Group. The other five members of the group “are not” elected officials yet can vote to make decisions on how “excess profits” from a government-owned/controlled venue should be donated.

    • Brown County Govt Reps Jerry Pittman (Commissioner), Darren Byrd (Council)
    • Convention Visitors Commission (CVC): Barry Herring, Kevin Ault, Jim Schultz
    • Other: Diana Biddle, Bruce Gould

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