PANAMA CITY — Proponents of a bed tax in Panama City say it should create a never-ending cycle, as the tax comes from people at hotels and pays for advertising, which entices more people to visit, creating even more tax revenue.
“The domino effect is that it creates jobs,” Bay Chamber of Commerce Executive Director Carol Roberts said.
The tax would be levied at 5 percent of every dollar on hotel, condominium and short-term apartment bills. It is up for a referendum vote Tuesday in Panama City.
The tax would be collected by Bay County and requires the creation of a tourist development board, which would decide how the taxes are used. The City Commission has elected to serve as the board. The Bay County Tourist Development Council and Bay County Commission are required to approve funding.
“Panama City has been left behind,” Mayor Greg Brudnicki said.
City officials already are devising plans of ways to use the money to attract events. Brudnicki said the city is primed to host yacht, sailing and fishing events on St. Andrew Bay, granted part of the bed tax funding is used to improve boat landings. He added that the yacht club is a particularly underutilized resource.
“We’re sitting in a prime location to host huge sailing events,” Roberts said. “It will draw the type of people that we want.”
The city is looking to attract people with disposable income, who will spend money in restaurants and retail outlets. Roberts has heard arguments that restaurants and other businesses will be affected because visitors will have less money to spend on other items. Roberts said there is no research to support that claim in either Panama City Beach or Mexico Beach, both of which already have bed taxes.
“It hasn’t had a negative impact on restaurants in Panama City Beach or Mexico Beach,” Roberts said.
The pros
Bay Arts Alliance Executive Director Jennifer Jones organizes dancing competitions at the Marina Civic Center, where it is a flurry of sequins and sparkles from late May through the end of July. Panama City hosts 3,700 families per year, most of whom use the time as a six-day vacation. With added promotion, Jones expects to see larger draws for the summer and off-season.
“We would see benefits even if we never saw dollars,” Jones said.
Brudnicki has expressed a desire to improve the Visual Arts Center so the venue could feature art with humidity and heat restrictions. Commissioner John Kady particular wants marketing dollars generated from the tax to go toward sports advertising.
Many Panama City hoteliers, like Jason Oaks and Harry Patel, support the tax particularly because the uptick in business they say they will receive from the increase in marketing will outweigh the occupants lost because of larger hotel bills. They also said that they have never heard of visitors refusing to stay somewhere because of a bed tax.
“New Orleans is really high. It’s like 12 percent,” Clay Keels, manager of Panama City Panache Tent and Event, said of that city’s bed tax. “It doesn’t stop me from going.”
Keels also expects his event business to grow because of the tax.
“It’s a good thing to collect it because it can enable more things to happen in the city,” he said.
Bay County Commissioner and Panama City resident George Gainer is routinely against taxes, but he supports the bed tax for Panama City because it has a low impact on citizens.
“It’s the fairest tax of all,” he said. “This is not an extra burden on the property owner. I’m surprised Panama City didn’t do this years ago.”
The cons
Doug Guetzloe with the statewide anti-tax group Ax the Tax believes local residents will end up paying a significant portion of the tax, even if it’s indirectly.
“A lot of people who visit areas are relatives of people who already live there,” Guetzloe said.
Guetzloe’s other main argument is the tax is unnecessary that the state advertises itself. If Panama City is interested in advertising, it should use reserves. He said the tax also could have a negative effect on corporate event planners who pay attention to areas where there is not a tax.
“As the temperature drops, people drop their eyes to Florida anyway,” Guetzloe said. “Generally, we’re opposed to these because they are a sales tax.”
Local opposition has been largely silent on the issue, with few hoteliers expressing negative views of the tax.
Panama City Country Inn and Suites manager Debra Dasenove believes visitors definitely check for bed taxes.
“They get their receipt and they ask about it,” she said. “If there’s some place where there isn’t a bed tax, wouldn’t you want to stay there?”
She said the tax will affect her business negatively.
“I think it’s stupid,” she said.
Polls in Panama City are open Tuesday from 7 a.m. to 7 p.m. For more information, call the Supervisor of Elections Office at 784-6100 or visit bayvotes.org.