Tourism Improvement Districts

Much of the urban parts of our nation are familiar with special services districts such as Business Improvement Districts. Lines are drawn, taxes are assessed to commercial property owners within those lines, and all of the newly generated revenues goes towards efforts to enhance the district: clean and safe initiatives, place-defining banners, joint marketing campaigns, and the like. It's an effective way to create and fund distinct commercial areas, and an increasingly popular form of efficient taxation, the thought being that my taxpayer dollars aren't going into some large pot to be divided up to death across the entire jurisdiction.

I was recently talking to downtown, waterfront, and convention representatives from a big city about a new wrinkle to this revenue generating mechanism: Tourism Improvement Districts (TID). With convention bureau marketing budgets sagging on account of lower hotel tax revenues, which are often a major revenue source for such activities, cities are setting up assessment districts which allow hotels to tack on an extra percentage point or two to your hotel room, the proceeds of which can be spent to market the region as a destination of choice for conventions and business events.

San Francisco passed its TID late last year. Cleverly, assessments are only on "tourist" stays, as stays by permanent residents and by airline crews are exempt; nothing like only taxing non-voters! Keep an eye out from a policy perspective to see if other cities follow suit - Vegas is among those contemplating a similar set-up - and keep an eye out on your hotel bill to see if "Tourism Improvement District Assessment" shows up there in the near future.