Agenda - 12-09-1995 - Attachment 2

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A Proposal to Increase the Orange County Occupancy Tax to 2% The Board of Directors of the Chapel Hill/Orange County Visitors Bureau would like to request an increase in the amount of occupancy tax collected on the rental of rooms in commercial lodging establishments from 1% (current) to 2%. They respectfully request that the proceeds of this tax continue to be dedicated to the Chapel HM/Orange County Visitors Bureau for the operation of the bureau and implementation of sales and marketing programs that encourage visitor spending in the community. This increase is requested to take effect in the Spring of 1996. Backgr�und In mid-1990, the Public-Private Partnership (PPP)established a task force of 54 citizens to determine the feasibility of creating a visitor services bureau in Orange County. After several months of study, the group formally recommended the formation of a bureau,which was endorsed by the PPP, the Chapel Hill/Carrboro Chamber of Commerce,the Hillsborough Area Chamber of Commerce,the Chapel Hill Hotel/Motel Association, and the Economic Development Commission. In July of 1991,legislation was passed enabling the Orange County Board of Commissioners to levy a room occupancy tax of up to 3% on the gross receipts derived from the rental of any room,lodging,or similar accommodation in the county. In August(1991) the Commissioners approved a 1% tax on transient accommodations,which was to take effect on September 1, 1991. An interim Visitors Bureau Board of Directors of 11 members was subsequently appointed, and a Director was hired in June of 1992. The Board adopted the following mission statement in September of 1992: The mission of the Chapel Hill/Orange County Visitors Bureau is to develop and coordinate visitor services in Orange County and implement marketing programs that will enhance the economic activity and quality of life in the community. Some of the Economic Benefits of Encouraging Visitors to Orangc Count v + Visitors have minimal impact on the existing infrastructure and government-provided services (schools, social services,etc. are not utilized by visitors). + Visitors spend money in existing businesses($69.93 million was spent by visitors to Orange County in 1993). + Visitors have a dramatic impact on the amount of sales tax that is collected and returned to local governments ($3.57 million in state tax receipts and$1.32 million in local tax receipts was collected from visitors in 1993). # Visitors support over 1,300 jobs in our community. 4 Property tax revenues are not used to support these efforts. The marketing programs and services provided by the bureau are paid for by visitors,through the proceeds of a county hotel occupancy tax.