Room Tax Funds OK'd for Airport
With legislative concurrence, Moore County will soon have a source of local match funding for two major capital improvements at the airport.
On a 4-1 vote, the Moore County Board of Commissioners on Tuesday night approved a resolution and interlocal cooperation agreement enabling the county to use 7 percent of the 3 percent room occupancy tax for that purpose.
Commissioner Tim Lea, who cast the dissenting vote, wanted the agreement to charge an interest fee on the airport payback of the money transferred from tourism promotion coffers.
“This is money being borrowed from the taxpayers,” Lea said.
But Board Chairman Nick Picerno argued that if interest were added to the agreement, it would still be paid by taxpayers.
“The more we discuss this issue, the more complicated it gets,” said Picerno in reference to the various parties involved in the agreement.
Before the local legislation could be introduced, the proposal needed action by the Convention and Visitors Bureau, the Moore County Airport Authority and the county commissioners.
Now, final approval is dependent upon the legislature’s vote on House Bill 545, which revises the room occupancy tax legislation. State Rep. Jamie Boles introduced the bill at the board’s request. (The N.C. General Assembly website reveals that the bill has been ratified by both legislative chambers).
Other commissioners agreed with Picerno’s point of view.
“The Moore County taxpayers own the airport,” Commissioner Craig Kennedy said. “It’s lending taxpayers’ money to the taxpayers.”
Commissioner Larry Caddell said the Board of Education holds title to school property, but in this case the county holds title to the airport property.
“We own it,” Caddell said. “It’s ours.”
Caddell made the motion to approve the agreement, with Kennedy offering the second. Lea made an amended motion calling for a 2 percent interest rate, but the motion died for lack of a second.
Caleb Miles, president and CEO of the Convention and Visitors Bureau, advised prudent investment if the tax collections sit in the (airport) account for a number of years.
The special 3 percent tax, enacted in 1987, is levied on lodging rooms rented in Moore County, in addition to sales taxes.
Collections are used to promote travel and tourism in the county. The program is administered by a board composed of locally appointed individuals, including one county commissioner.
Revision of the bill specifies that room tax collections may also be applied to tourism-related expenditures.
The resolution drafted by County Attorney Misty Leland and adopted by the commissioners says that “the airport falls under the umbrella of travel and tourism.” It specifies that apron and runway expansion and safety projects may be funded by a portion of these tax collections.
Under the revision, the county will retain 7 percent of the overall 3 percent collected in room occupancy taxes, the retained funds to be used to reimburse the county for the local match to draw down state grants for the airport.
Much of the money awarded by the N.C. Department of Transportation (NCDOT) comes from the Federal Aviation Administration. The FAA grants require a 10 percent match, split between state and local governments.
In February, the county agreed to a local appropriation of $250,000 as its match for NCDOT funding for airfield improvements, including an apron expansion.
However, the low bid for the project came in under budget at $2,069,989.69, reducing the local match to $231,000.
The airport authority is expected to ask the county for another match for a runway expansion and safety project, estimated to cost $800,000 to $900,000. The grant for this project has not been approved by the state. If the grant is not received, then the county will not seek this reimbursement from the room tax.
At a planning retreat several months ago, airport authority members and administrative officials advised the commissioners that several costly improvements are needed if the airport is to accommodate the heavy influx of visitors expected for the back to back U.S. Open tournaments in 2014.
Airport profits have been lean in recent years because of the recession, and the airport does not have funds to cover the local match. Rather than take the match from property tax payments, the commissioners decided to divert part of the room tax collections to the airport under the theory that the airport is a viable tool of the tourism industry in Moore County.
Contact Florence Gilkeson at email@example.com.
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