Bossier, Caddo should defeat again hotel tax hike

A bad idea repackaged slightly still is a bad idea, and on Nov. 21 Bossier and Caddo Parish voters should vote accordingly negative on the proposal to fund the parishes’ joint Shreveport-Bossier Convention and Tourist Bureau’s 1.5 percent tax on hotel and overnight camping fees.

Voters narrowly rejected this retread just over a year ago, with this version differing only in that it asks for a half-cent fewer. It would commence on Pearl Harbor Day of this year and last nearly a dozen years, the proceeds of which would go to trying to attract sporting events, teams to play in Independence Stadium, and airlines and flights in and out of Shreveport Regional Airport.

As previously noted in this space, the Bureau continues to sit on lots of cash – over $5 million of which over $3 million in unrestricted – a growing total as it takes in more than it spends. And the airport’s problem is its high fares as it continues to rank among the most expensive for airports with 100,000 to 200,000 originating passengers. There’s no reason to throw unneeded dollars at the Bureau nor will more money solve for the inefficiencies at the airport.

The basic economics of the situation also remain unchanged. The schtick behind it falls back upon the resurgent populism seen statewide over the last year, from the raising of taxes by several hundred million dollars through claiming somebody else, in this case businesses, only will pay this spring, to the promises this fall, particularly by Democrat gubernatorial candidate state Rep. John Bel Edwards, of more of the same and also increased spending that allegedly won’t affect individuals’ pocketbooks.

But there’s no such thing as a free lunch. Even if the direct payments from the increased taxation would come almost exclusively from non-residents, every area citizen ends up paying it, in two ways.

Higher prices because of the additional tax will discourage the tourism business. Depending upon the price elasticity of the typical person and his marginal resources, this actually could depress the amount of tourism activity as the bribes dangled to event participants and to tempt lower fares to get to the area may not be enough to offset the increased costs faced by travelers for lodging. In turn, this costs jobs and dampens ancillary economic activity, such as for purveyors of food and drink.

Related to this, with a reduction in economic activity comes decreased tax revenues for local governments. In a sense, that means imposition of this tax can beggar local governments through indirect diverting of funds they otherwise might receive to the Bureau, leading to higher taxes and/or reduction of services by these. What’s preferable, getting a few more visitors into the area or avoiding cutbacks to government services?

Just as questionable as whether across the entire local economy levying the tax ultimately would produce net benefits is if the election decision will work. Proponents count upon lowering the amount from last time to gain a majority. The timing aspect also takes a risk: last year, the defeat came during the higher-turnout general election, and gubernatorial runoffs historically have higher turnout than their associated general elections. Backers may think that higher numbers of casual voters in the electorate that would have participated in last month’s general election more likely will view as true the false claims that area residents won’t pay in any manner with adding the tax.

Regardless of when or amount, its premise remains flawed. Voters again should do the right thing by voting down this destructive measure.