Eureka Chamber voices support for CAPC; calls for elimination of tax on gift shops

Monday, June 26, 2006

eureka springs -- The Greater Eureka Springs Chamber of Commerce released a position paper on Monday, voicing its support for the continued operation of the City Advertising and Promotion Commission (CAPC) and the tax it collects.

The CAPC has come under increasingly vocal attack in recent months, and a petition has been circulating calling for a referendum on the elimination of the commission and its two percent tax on lodging, restaurants, attractions and retail gift shops.

Jeff Feldman, president and CEO of the chamber, released the position statement, which says that the organization "strongly supports the City Advertising and Promotion tax and the Commission. The tax revenues generated by our several hundred thousand visitors per year are highly necessary for the appropriate level of advertisement, promotion and growth of our tourism-based economy."

The position statement went on to offer numerous suggestions on how better the CAPC might do its business, including streamlining of the commission and strongly publicising its mission statement to increase credibility with the business community.

It went on to suggest that, with an "oversight" business model, reductions in overhead in areas that do not create direct return on expenditures would be needed. The business model would allow only for expenditures meeting a more narrowly-defined criteria of advertising and promotion. It suggested a goal of 75 percent of collected dollars be spent on qualified advertising expense.

The position paper went on to suggest that "the "oversight" business model would not include expenditures on city infrastructure, financial instruments, or debt service. Plans could be made to gradually phase out CAPC operation of and financial responsibility for The Auditorium and allow the gradual phasing out for a separate private foundation or city-operated venue. Festival production could be gradually transitioned to private production inclusive of CAPC co-op effort."

It went on to suggest:

* A five-year marketing plan, flexible enough to adapt with marketplace changes;

* Selecting "advertising and promotion vendors" to execute marketing strategy and advertising direction;

* Oversight and performance reporting of said vendors.

"It is also posited that a way to suspend the Retail/Gift Shop provision of the CAPC tax collection be found," the position statement went on to say. While it suggested that travelers are accustomed to being taxed for lodging, food and entertainment through surcharges, including that tax on retailers may put them at a competitive disadvantage with neighboring merchants.

The paper also suggested a number of changes in makeup of the CAPC. "The goals and mission of the CAPC might be better served by the nomination of commissioners by the sitting commission with approval by city council. Nominations would be limited to business representatives engaged in the actual collection of the tax, with primary residence in Carroll County required. Charter language is encouraged that would require a definite time frame for the nomination and appointment of commissioners to expired seats. Failure to act timely could be remedied by citizen referendum. With a suspension of the Retail / Gift Shop provision, the commission representation would require an allocation change. The commission could be expanded to three members each representing lodging, attractions, and restaurants in addition to two city council representatives and mayor. An alternative make-up could include an at-large representative.

"An external revenue stream is necessary to support continued public awareness and promote trial of the product of Eureka Springs. There is an underlying but solid inter-dependence of every single business in the area upon every other single business. Estimates indicate visitors to Eureka Springs or visitor related services generate 70 percent of sales tax revenues received by the city. Without unique and comfortable places to stay, there are no visitors. Without unique and exceptional places to eat there are no visitors. Without things to see and do, there are no visitors. Without a base of activities known to draw travelers like shopping and galleries, there are no visitors. Without visitors, there is no need for businesses that serve traveler-related enterprises. No visitors, no tourism, no businesses, no money; Eureka Springs becomes a bedroom community. The Chamber advocates keeping the tax and operating the CAPC within an alternate business model."

Respond to this story

Posting a comment requires free registration: