Leveling the field: Expo Center now gets same tax funding as Frontier Texas!

Taylor County Judge Phil Crowley said he's making an effort to give the city of Abilene a shout-out when one is due. That, he said, will foster a stronger working relationship between the two local government entities.

He recently had good reason to do so.

Crowley, who is in his sixth month as county judge, thanked City Manager Robert Hanna for balancing the distribution of the venue tax - specifically, providing more money to the nonprofit Taylor County Expo Center.

"I have enjoyed working with Robert Hanna. He has been a great resource for me," Crowley said, also noting a solid friendship with new Mayor Weldon Hurt. Strong relationships, Crowley said, can only help both entities.

The City Council recently approved 3% of its general hotel occupancy tax to be paid directly to the Expo Center. It took 1% from the Abilene Convention and Visitors Bureau, Abilene Convention Center and Abilene Cultural Affairs Council.

Separately, at the annual Venue District board meeting, 0.5% of funding that had gone to Frontier Texas! was shifted to the Expo Center.

That will bring tax funding to a 50%-50% level between the two entities.

"The city and county work really well together," Crowley said. "With this new agreement for the venue tax, we're seeing a continuation of the city and county working extremely effective` together. We're always on the same team, but especially with putting heads in beds."

Funding comes from a tax charged at hotels and motels.

The local lodging tax is 15% - 7% for the state, 6% for the city and 2% for the venue district. This is different from the 8.25% sales tax.

Timing was important. The venue district is due to sunset in June 2024 unless a renewal of the district is approved by voters with a new capital project, which is required. That election has been tabbed for Nov. 7. A renewed district also would be for 20 years.

A venue district must support a capital project, and one has been in the planning stages anticipating a renewed venue district.

Crowley said the agreement is to put the first $2 million bond debt service toward a "shovel-ready project" for Frontier Texas! The remaining revenue would be split between the history center and the Expo Center.

With Frontier Texas! stepping up to provide the capital project required, the city was able to extend HOT funding to the Expo Center.

The venue project will be an Abilene-Taylor County effort, "so (the Expo Center) should get 50 percent of the venue tax," Hanna said. It also helps Frontier Texas! but not putting that entity in a financial bind, Hanna said.

Jeff Salmon, executive director of Frontier Texas!, said the $5 million project will include expansion to house traveling and other temporary exhibits, an area for an archival collection and other physical improvement that include parking and entry access.

On flipside, "the city has agreed to give 3 percent to the Expo Center," Hanna said. The idea is to work together, he said. An even split, he said, now "resolves some of the underlying friction" caused by Frontier Texas! previously getting more funding than the Expo Center.

Ten years ago, it 60%-40% in favor of Frontier Texas!

Hanna returned Crowley's compliment.

"He's done a great job of bringing the county and city together on some of this stuff," Hanna said of the new county judge. "He's open to new ideas and having conversations."

Why funds are so important

The Expo Center operates independently, though the county provides labor and equipment for projects such as maintenance.

HOT funds are more crucial to Frontier Texas! Those make up about two-thirds of its yearly budget. It's about 10% for the Expo Center, which relies events such as the Western Heritage Classic and West Texas Fair & Rodeo to bring in big money.

The recent Texas High School Rodeo Association State Finals, held for the 34th year at the Expo Center, was promoted as generating $2.4 million for the local economy.

"The Expo Center is a source of pride for me," Crowley said. "It's a big deal."

Rochelle Johnson, general manager of the Expo Center, not surprisingly was delighted with the city's decision to send more money her way.

"I am very happy to now be receiving 50% of the venue tax," she said. "The Expo Center generates a tremendous number of hotel rooms every year. The venue tax is a tax on hotel rooms, therefore, a tax our local citizens don’t have to pay unless they stay in a hotel room locally. "

Crowley agreed that venues benefit from outside money that is spent here on lodging. Using this type of funding locally is widespread across the state.

"It's the price of traveling around the state," he said.

Amounts vary.

"It makes sense that tax revenue is spread around," Crowley said. The five groups that receive funding "are the ones that are driving visitors and tourism. It's all circular."

HOT funds previously provided a funding incentive to build the DoubleTree by Hilton, which is due to open June 28. Construction of a downtown hotel was determined to be a future driver of the local economy. It is located across the street from the Convention Center.

Some history

A venue tax district was established in 2004, when voters by 64% approved raising the tax charged to lodgers from 13% to 15%, with 2% going to the newly created district.

That allowed for the opening of Frontier Texas!

The board consists of two members representing the city - the mayor and a council member - and two from the county - the county judge and a commissioner. There is an appointed fifth member, who would be considered neutral in a discussion.

For a time, there was a third split - for Shotwell Stadium improvements. Funding was for construction funds, and allocations for the Abilene ISD were completed in 2012. The debt service for paved parking and improvements there will be paid off next June.

Over the first five years, Frontier Texas! received 55% of HOT funds. The Expo Center received 25%. Both entities received more money as funding ended for Shotwell. In 2013-14, 20% more went to Frontier Texas!

Since then, the differential has decreased.

Hanna said the venue district will issue debt for the new capital project on behalf of Frontier Texas!

It should be noted, he said, that debt service has to be paid from tax funds.

There are two options, Hanna said.

One is to pay the debt service from available revenue, then split the tax revenue 50-50 and then left the entity benefitting from the debt issuance (Frontier Texas!, in this case) pay the debt service from its half of the revenue.

Historically, that is how it has worked here, he said.

Frontier Texas! gained twice, getting its share of the revenue and the debt service paid. That put the Expo Center at a loss.

That now changes. The Expo Center will get what both city and county officials agree should be its fair share.

"This 3 percent fills the gap on the debt service," Hanna said.

This article originally appeared on Abilene Reporter-News: Leveling the field: Expo Center tax funding equal to Frontier Texas!