Eureka Springs CAPC commissioners criticize petition effort

Eureka Springs City Advertising and Promotion Commission members didn’t hold back while voicing their opposition to a petition being circulated around the city.

Resident Pat Matsukis has been trying to gather 148 signatures on a petition seeking a public vote on whether to eliminate the city’s tourism tax and CAPC. The 3 percent tax is collected on lodging and food and beverage taxes and funds the city’s advertising and promotion efforts. Matsukis is seeking to have the proposal placed on the November general election ballot.

“I think this is grossly irresponsible,” CAPC chair Steve Holifield said at the commission’s regular meeting on Wednesday, July 24. “This petition, it would do away with the CAPC without any kind of economic feasibility study to see what would happen. I think a lot of citizens in this town would be open to discuss if there are alternatives to the CAPC, but that should have happened six months or a year ago to have a conversation and talk about and sit down and do a study to see if there is a proper way, another way of doing it.

“Every town or state that has ever voted away their A&P … have regretted it. The state of Colorado regretted it. The state of Connecticut regretted it. …There’s a town in Colorado that did away their funding and it took them 10 years to get tourism back to where it was.”

Commissioner David Avanzino said eliminating the tourism tax will trickle down and have a negative impact on other collections the city receives.

“I don’t think people are recognizing or seeing the economic implications of doing away with the CAPC,” Avanzino said. “We’ve got the 3 percent tax and with that 3 percent tax we collect alcohol, sales tax, all the taxes that come along with that. Getting rid of an agency that provides advertising to bring people to our city and cutting that off means you cut off tourists.

“If those tourists don’t come here anymore they won’t spend money and we don’t collect the tax anymore, alcohol taxes fall, sales taxes fall, unemployment rates are going to go up, homelessness is going to go up. People just don’t see the trickle- down effect of what this petition can do to our city. It would be devastating. We would lose millions and millions of dollars.”

Commissioner Kolin Paulk agreed, saying the lack of advertising would drive away tourists, which would cause businesses to suffer. “We have over 60 restaurants [in Eureka Springs] for 2,000,” Paulk said. “When I said 2,000 people in Eureka Springs, that’s insane. It’s not because there’s 2,000 people who love to go out and eat. It’s because we have enough tourists to fill 60-something restaurants in Eureka Springs. That would not be the case without a CAPC.”

All business, including retail shops, would suffer if the CAPC is eliminated, commissioner Bradley Tate-Greene said.

“You’ve got 12 open shops downtown right now,” Tate-Greene said of former businesses that are currently vacant. “You’re going to have 24, 36 open shops taking away. It’s really going to cause a lot of detriment.

“People like David, Kolin and myself, who run restaurants, may have to seek other opportunities and close our doors because we won’t be able to operate, and that’s our livelihood. We’re on this commission because we love this city and we want to serve everyone in the city and do what’s best for our city. … I don’t think some people know if you sign the petition and if it passes, getting the CAPC back after it’s gone is probably going to be close to nothing.”

Avanzino responded: “Oh, it is nothing.”

CAPC executive director Mike Maloney said he crunched some numbers when it comes to the money spent by tourists who visit Eureka Springs.

“The daily spend is based upon the collections that come in,” Maloney said. “If we just go back to the 2023 numbers, that’s $2 million [in CAPC taxes] collected. OK, 3 percent equals $2 million and 97 percent is approximately $80 million. The $80 million divided by 365 is an average of about $275,000 per day spent on food and lodging in Eureka Springs. That doesn’t count alcohol sales, doesn’t count sales tax, retail sales.

“So when you take a look at just those numbers alone, do you want to take a quarter of a million dollars away that is spent every day in the city? I don’t really think you do. I really don’t.”