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Our Hudson Taxes and Community Contributions

Accountability for Our Tax Dollars May Be Less Than We Think

The city of Hudson has long had a well-deserved reputation for spending its funds wisely, resulting in a relatively high delivery of city services for each dollar of tax levy.  The word “accountability” comes up each fall during the budgeting process, and accountability would seem to be prominent in the decision-making process that results in an annual city budget.

There is one area of city expenses, though, that does not appear to undergo such scrutiny for accountability.  This lack of oversight doesn’t portend anything sinister at the  the city council.  Rather, it’s something that simply gets missed. It’s part of a budget item called “Community Contributions”, and it generally deals with projects and events not operated or controlled by the city, but which are considered to be beneficial to the city nevertheless, and therefore worthy of taxpayer support.  Many of these are straightforward enterprises; the Fourth of July fireworks are included in this, as is the downtown beautification program, and aid to some non-profit organizations.  

There is probably a plausible argument regarding whether any city government should be picking winners and losers amongst area non-profit organizations, just as there’s probably a legitimate question whether a city ought to be in the business of giving public funds to any private groups.  Those arguments are for another time; here, we’ll be discussing our tax dollars and accountability for what happens to them, as pertains to just one segment of community contributions.

 The majority of the money classified as a community contribution in Hudson goes to one member-owned trade association, the Hudson Area Chamber of Commerce and Tourism Bureau.  Since the funding for these contributions comes from the room tax levied on those who stay at Hudson motels, it seems proper that some of it should be put to use encouraging more people to visit Hudson.  The thing to remember, though, is that, while room taxes are taxes we collect instead of taxes we pay, the money is still ours.  It resides in the general fund, to be used just the same as any other taxes.  It is also subject to the same accountability as the rest of the city budget.  More, in fact, as only the funds given to the HACCTB are covered by state law, which says that any organization chosen by the city to administer tourism dollars must give an accounting, every year, of where those dollars have been spent.

 It’s important here to distinguish between the Chamber and the Tourism Bureau.  The Chamber conducts business on behalf of its members in the furtherance of commerce in the Hudson area.  We’re not discussing the Chamber or its members.  Only the Bureau is to receive funding by the city to conduct tourism efforts on behalf of the city.  And the funding is substantial, currently over $100,000 annually.  Remember, this is over $100K of our money.

 How is this arrangement of granting tax funds to the Tourism Board working out?  We’ll look into this tomorrow, but don’t be surprised if the phrase “not well” comes to mind.

This post is contributed by a community member. The views expressed in this blog are those of the author and do not necessarily reflect those of Patch Media Corporation. Everyone is welcome to submit a post to Patch. If you'd like to post a blog, go here to get started.

mainstreet January 24, 2013 at 03:39 AM
While I do not know when the City of Hudson room tax was first initiated, the law states that 70% of it be used towards promoting tourism if the tax was enacted after 1994. If the tax was enacted before, then it can indeed be used for the general fund. As far as the Chamber and Tourism Bureau being separate entities, I don't see how. They may want you to believe that but they file their taxes as the "Hudson Area Chamber of Commerce and Tourism Bureau" Check it out, anyone can. They file as a nonprofit and therefore their tax returns are public information.
Scot O'Malley January 24, 2013 at 04:24 AM
Hudson's room tax predates the state law, which does not apply here. The city council gradually moved ithe grant to 70% under the prodding of then-mayor Knudsen, but that does not commit the city to 70% permanently. In any event, this article is about accounting for where the money goes, which is another matter entirely. And the Tourism Bureau is highlighted to avoid any discussion of the Chamber members, who are also not part of this discussion.
mary yacoub January 24, 2013 at 04:41 AM
Scot you voted yes to move the percentage to 70% & where we spend it Note October 4, 2010 meeting minutes and the minutes of November 8, 2010 these minutes you seconded the motion adjusting the dollar amounts and if I recall it was to give a bit more to the Octagon House: Oct. 4, 2010 UPDATE FROM KIM HEINEMANN RE: TOURISM ACTIVITIES, AND REQUEST FOR AMOUNT TO BE CONSIDERED FOR 2011 ROOM TAX GRANTS: Hudson Area Chamber of Commerce and Tourism President Kim Heinemann provided an update on activities, financial statistics, and other accomplishments, regarding the tourism programs and budget for the Chamber. She requested that the City increase the Chamber of Commerce and Tourism Room Tax allocation to 70% for 2011. Discussion was held. MOTION by Morrissette, second by Burchill to approve an increase in the 2011 allocation of Room Tax revenues to 70% for the Hudson Area Chamber of Commerce and Tourism Bureau. Additional discussion was held regarding the projected revenue, percentage of actual Room Tax revenue, city tourism and beautification, Grant Program, and budgeting. It was agreed that the Chamber was doing a good job of promoting tourism in the Hudson area. Ayes (5), noes (1-Wyland) MOTION CARRIED
mary yacoub January 24, 2013 at 04:45 AM
November 8, 2010 Mayor Knudson stated the Finance Committee voted to reduce disbursements by 10%. MOTION by Bernard second by Yacoub to approve the Finance Committee’s recommendation that the City Tourism and Beautification allocations be reduced by 10% across-the-board for 2011 (for a total of $36,450) with $4,050 to be designated for the Grant Program. Vote taken: Ayes (2) - Bernard and Yacoub; Noes (3) - Morrissette Wyland and O’Malley MOTION FAILED. MOTION by Wyland, second by O’Malley to adjust the City Tourism & Beautification amounts to: Fireworks $10,000 Holiday Lighting $ 4,500 Concert Series $ 4,000 Banners $ 2,500 Flower Baskets $ 2,500 Octagon House $ 4,000 Cemetery $ 4,000 Senior Citizens $ 2,500 VFW $ 1,000 Miss Hudson $ 2,500 Grant Program $ 3,000 Additional discussion was held. Vote taken: Ayes (4); Noes; (1) – Yacoub, MOTION CARRIED. Mayor Knudson provided background information about Room Tax revenue, community subsidies and tourism support. He stated the Finance Committee (by split vote) recommended using a revenue amount of $135,000 for 2011, increasing the tourism portion to 70%, allocating $35,000 for City tourism and beautification program, and $5,500 for the Grant Program.
mainstreet January 24, 2013 at 05:22 PM
You cannot separate the Tourism Bureau from the Chamber is my point. They are joined at the hip and the tax return proves it. You obviously are trying not to tick off Chamber members because of some future political run I'm sure, but the two are inseparable as the tax return shows. Don't know what your expose tonight is, but here is one for you - The 2011 tax return shows that the yearly income for the Hudson Chamber of Commerce AND Tourism Bureau as $409,875. Total Salaries - $247,718. Thus we have a nonprofit that uses 60% of its income to pay salaries! Not much return here, that's for sure. BTW - keep up the good work Mary!
Tanya K January 25, 2013 at 01:15 AM
Mary, Thanks for the true facts!

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