Funds may shrink as fewer dine out

Arts groups could lose city funding with expected dip in hospitality revenue

By ADAM BEAM - abeam@thestate.com

Higher gas prices and an overall economic downturn mean people are eating out less in Columbia — which is bad for restaurants but could be worse for the Main Street Latin Festival, Riverbanks Zoo and a RuPaul event sponsored by S.C. Pride.

Those groups depend on hospitality tax money — the two cents on the dollar you pay every time you eat out.

The city already has committed $4.4 million of that money to a number of arts groups, and Councilman Daniel Rickenmann, who owns Mo Mo’s Bistro, wants to hold 25 percent of the money in reserve to protect the city in case hospitality taxes fall short.

That means the 47 small arts groups that depend on that money to put on an array of festivals and programs would only be guaranteed 75 percent of their allotment — another casualty of a slow economy.

So groups like S.C. Pride, which is bringing drag queen RuPaul to Columbia on Sept. 20, would get $7,500 instead of $10,000.

“We’ve got the money for RuPaul set for sure, but it would definitely hinder our advertising campaign,” said Ryan Wilson, president of S.C. Pride, adding that the group just went to press on 5,000 copies of a full-color guide on glossy paper.

Most of the larger groups — including the Columbia Museum of Art and EdVenture — receive their tax money quarterly for operating expenses. They wouldn’t be affected until the last quarter, said Libby Gober, who manages the hospitality tax fund for the city.

Rickenmann said he hopes the move would be temporary and the city could release the money as soon as it comes in — if it comes in.

“I would rather plan ahead,” Rickenmann said. “What happens if we didn’t hit our projections and we have already dolled out this money? It would have to come out of the general fund.”

Council will vote on the proposal at its Aug. 6 meeting.

Every year, the city’s budget planners estimate how muchthey will receive from hospitality taxes — $7.4 million for this budget year. In the spring, city officials decided how to divide up that money.

Four groups — the Columbia Museum of Art, the Columbia Music Festival Association, EdVenture and Historic Columbia — split $1.9 million. Another $800,000 goes to the city’s general fund to pay for park rangers, and $2.5 million is doled out by a committee to 47 smaller groups.

The remaining $1.7 million goes to pay off a loan the city took out when it started collecting hospitality tax money in 2003 so it could start paying for projects earlier.

The city’s business license division collects the money every month. So far, the city has collected more money each month than it did a year ago. But the city also has four more restaurants operating than it did last year.

“Those numbers don’t reflect what I’m hearing,” from restaurant owners, Gober said.

Both Rickenmann and Councilman Kirkman Finlay, who owns Congaree Grill, say their business has slowed significantly.

Gabriele Evans, office manager for Garabaldi’s on Greene Street, said business is just fine.

“Columbia slows down as a whole in the summer. Because we live in Columbia, we go to the beach, we go to the mountains,” she said. “We just closed out a very, very good week.”

Most groups turn in receipts to be reimbursed for their events, but a few get the money up front to cover their costs.

It is those groups, including S.C. Hispanic Outreach, that could be hurt the most if council approves the proposal.

“Oh my gosh, yes,” Genaro Padillia, director of the Main Street Latin Festival, said when asked if getting less hospitality tax money would hurt the festival. “We are looking at doing this festival regardless ... Everybody is in the same boat in the city, with the economy the way it is.”

Gober said holding some of the money in reserve is most fair plan. Otherwise, groups that have events in August would get all of their money, while groups that have events in April might find themselves shorthanded.

“I want to be fair across the board,” she said. “If the projections didn’t come in, I’m not sure where we would get the money from.”

The proposal would be another setback for arts groups seeking public dollars to put on their events. The groups usually compete for money from two funds: hospitality taxes and accommodations taxes, which come from hotel rooms.

Earlier this year, City Council voted to give all of the accommodations tax money to two groups, the Columbia Convention Center and Visitors Bureau and the Capital City Lake Murray Country.

Reach Beam at (803) 771-8405.