Charlotte city and tourism leaders pursue tax extensions, while keeping the public in the dark
The city of Charlotte and local tourism leaders are backing an effort in Raleigh to extend two tourism-related sales taxes decades further than their planned sunset dates, until 2060.
The first is a 1% tax on prepared food and beverages that’s primarily paid by county residents. But despite that, city officials have not briefed the full City Council, at least not in public. The proposed tax extensions were not mentioned in the City Council’s regular briefings from city staff about the legislative agenda, and there has been no other public presentation about extending the taxes.
The language to extend the taxes was added Tuesday to an existing bill that would create a special license plate for the Charlotte FC soccer team. The bill’s primary sponsor is Mecklenburg Republican House member John Bradford. Four Mecklenburg Democrats have also signed on to the measure: Becky Carney, Mary Belk, Terry Brown and Carolyn Logan.
The food and beverage tax — which is expected to generate nearly $47 million next year — was enacted to fund the Charlotte Convention Center. By law, it sunsets in either 2031 or when the final debt payment is made on the building.
Last decade, the legislature amended the tax to allow proceeds to also be used for amateur sports and a football-sized stadium. The city used that money to pay for $75 million in improvements to Bank of America Stadium.
Having the tax extended for nearly three decades would give the city a nest egg to pay for the next big ask from Carolina Panthers owner David Tepper and the team. The city is expecting Tepper to ask for hundreds of millions of dollars to renovate Bank of America Stadium or build a new one.
Unlike other local tax efforts such as the proposed 1-cent sales tax to fund transit, the food and beverage and hotel tax can be extended without voter approval. Still, Mecklenburg Commissioner Susan Rodriguez-McDowell said she was surprised the city didn’t talk about the proposal. She said that because county residents pay the tax, the city should have discussed the extension in public.
“It lays on me kind of funny that we have no awareness of this,” she said.
At-large City Council member Dimple Ajmera, who chairs the Budget, Governance and Intergovernmental Relations Committee, said she was never told about the proposal.
“It was not discussed at the council meeting or the committee meeting,” she said.
The bill would also extend a 2% tax on hotel and motel rooms for the NASCAR Hall of Fame.
That money is being used to pay the debt service on the hall, which opened more than a decade ago. The bill would also allow that money — which is expected to be roughly $20 million next year — to be used for maintenance and renovation at the museum.
The most recent debt service payment on the hall is about $9 million. With that tax being extended from 2038 to 2060, it’s likely the Hall will compile a large sum in the upcoming decades. It's unclear how the Hall would spend that money.
A spokesperson for the Charlotte Regional Visitors Authority, which manages the city-owned Hall, said Tuesday that “It’s premature for us to comment.”
Tracy Dodson, Charlotte's economic development director, also couldn’t be reached for comment.
City spokesperson Jason Schneider said in a statement that the hospitality industry is leading the effort on the taxes.
“The city is aware of their efforts and is supportive,” he said. “City staff were available to legislators (in Raleigh Tuesday) to provide technical answers but were not called on and did not comment.”
The House Finance Committee gave the bill a favorable recommendation Tuesday.
Two members of the city’s hospitality industry spoke in favor of it, including hotel owner Vinay Patel. Historically, some in the hospitality industry have felt that the tourism taxes the city levies belong to them, in a way.
The hotel taxes are mostly paid by non-Mecklenburg residents. And many hotel and motel owners have agreed that the taxes help bring conventions and events to the city.
“By approving this we will continue to prosper and thrive and be the job creators and economic development engine that we have been and promise to be in the future,” he said.