In early May, the city of Charlotte and two hospitality industry leaders went to Raleigh to lobby for an extension of two taxes dedicated for tourism.
The first is a 1% tax on prepared food and beverages inside Mecklenburg County. That money could be used to help renovate Bank of America Stadium for the Carolina Panthers. The second is a 2% tax on hotel and motel rooms, which is dedicated for the NASCAR Hall of Fame.
A bill to extend the taxes until 2060 quickly cleared the state House finance committee on May 2.
It has gone nowhere since.
With the General Assembly’s session likely to end in less than a month, it’s unclear if the bill will move. That means it’s hard for the city to commit to any deal with the Panthers because it can’t assume long-term debt from a tax that expires in 2031. City Council members have discussed in closed session a concept of a $1.2 billion renovation, with the public paying about half, according to media reports.
Mecklenburg Democratic House member Becky Carney, a cosponsor of the tourism taxes bill, said las week she had no idea why the bill has been held up. Dana Fenton, the city’s lobbyist, also didn’t know.
It’s possible that the tax extensions could end up tucked into the state budget.
But as of now, not everyone is on board.
That includes the North Carolina Restaurant and Lodging Association.
Lynn Minges, the organization’s president, said in an interview that she is not necessarily against extending the food tax. But she wants to know more about how the money will be used before she and the organization's three lobbyists give it their blessing.
Minges said she has been pleased with the investments the city of Charlotte has made with revenue from the existing 1% restaurant tax. That includes renovations to Bank of America Stadium a decade ago.
“We think there have been positive outcomes for the market,” she said.
The Charlotte City Council did not disclose publicly that it was looking to extend the taxes, perhaps because it didn’t want the effort to be associated with a Democratic city asking Republican lawmakers for a favor. The city instead let Mohammad Jenatian, of the Greater Charlotte Hospitality and Tourism Alliance, and hotelier Vinay Patel make the case for the extensions in front of the finance committee, with city officials also in attendance.
But Minges is surprised that the city did not speak to her about the tax extension since it directly impacts her members.
She said the food tax is fundamentally different from the hotel/motel taxes and that the city of Charlotte needs to acknowledge her group’s concerns.
“They are totally different taxes,” she said. “On the meals tax, those are paid by citizens in the county — people who work during the day and grab lunch. That money should be invested in things that should benefit the whole community. Citizens should expect to know that as well.”
She added that meal taxes are considered to be regressive.
“Historically when there is a prepared meals tax, it hurts low-income people,” she said. “That’s why we generally don’t support new meals taxes. This is a little different because moving the sunset of the tax won’t change a lot.”
She added: “If you are going to levy this tax, it’s only fair to let us know what it’s for.”
Speaking of the Panthers
North Carolina lawmakers earlier this month approved sports betting, allowing for a dozen online licenses and eight “sportsbooks” where people can place bets, including Bank of America Stadium.
The Charlotte Ledger did an estimate of how much those license holders might make annually in revenue, and came up with $40 million. (The actual license would be held by a gambling company like Harrah’s, and the Panthers would receive new money from a sponsorship deal with the gambling operator.)
That would be new money flowing to the Panthers, at a time when owner David Tepper is pushing for a stadium renovation.
Let’s say the team nets $30 million a year from gambling. That’s worth about $400 million in long-term debt. If the team netted $15 million from its sponsorship, that could be financed for nearly $200 million of stadium improvements.
The Ledger also wondered: Will the Panthers acknowledge that they will likely have been given the opportunity to make millions of new dollars, which was only made possible by the government? Will that absolve local taxpayers from some of the burden of paying for an improved stadium?
