Suggested changes in how Columbia awards $10 million from meal tax get early mixed reviews

Some recommendations by consultants to improve the way Columbia doles out its multimillion dollar meal-tax income are worthwhile, but some seem impractical, the chairman of the citizens committee that disburses about a third of the total said.

The consultants’ recommendation that applications for the coveted money be made anonymously are not wise, said Will Green. And suggested changes to the definition of an out-of-town visitor could hurt the chances that small arts groups would be funded, he said.

But Green said the city’s 11-member, council-appointed citizen’s panel will meet soon to make a formal recommendation to City Council on ways to upgrade the highly competitive process through which the city disperses $10 million-plus yearly to local groups whose events and attractions bring in tourists.

A council committee is to take up recommendations in the consultants’ report Monday at City Hall.

Asked if the process would be better if the full list of recommendations are adopted, Green said, “I’m not certain about that. I think there is much of value in the report. I’m not sure some of it is practical.”

Last week, University of South Carolina assistant professor David Cardenas reviewed the 60-page report compiled by him and three other PhDs for City Council members. Cardenas told council that events paid for with meal taxes helped “significantly increase the image of Columbia.”

The consultants from USC’s School of Hotel, Restaurant & Tourism Management recommended that City Hall fund even more such events as the pot of money, commonly called “hospitality taxes,” grows.

The 2-cents on the dollar tax on prepared meals is paid largely by patrons of restaurants, bars and festivals.

The city’s budget director, Missy Caughman, said revenue from the 2 percent tax is growing. Annual collections have climbed between 3.5 percent yearly to 6.9 percent each of the past four fiscal years. Caughman projects a 5 percent growth to $11.5 million for the 2016-2017 fiscal year that begins July 1.

But the consultants recommended that council streamline the way it doles out the money and advised council to stop meddling in its citizen advisory committee’s recommendations about which groups to fund and how much money to distribute.

Council has the ultimate authority on how the money is spent, but it generally follows the panel’s recommendations. A handful of large organizations have been selected by council for direct funding from council itself. That list has been growing, attracting more groups seeking so-called “line item funding” from council.

Critics say council has a habit of hand-picking organizations and granting them more money. That, detractors say, encourages groups to bypass the citizens committee, which spends days pouring over financial, attendance and other data in deciding how much it will suggest each group receive. Council does not go through that extensive process when it allocates its portion of the money.

Cardenas said the team also suggests converting the application process largely into a paperless, online system in which groups seeking money would be anonymous. That way, the consultants said, decisions would be based on merit and documentation. Some organizations have not complied with providing thorough paperwork, committee members have said.

The consultants also said the city and the organizations should use social media more often to promote their events.

A sampling by the consultants of six events, ranging from small to large, showed that the city and the sponsoring organizations are overstating by half the number of coveted out-of-towners who come to their events. Organizers placed the number at about 50 percent. Cardenas estimates it’s about 25 percent.

“So the new money isn’t really new money to the city of Columbia,” Cardenas told council.

Cardenas said the industry standard for an out-of-town visitor is someone who came from 50 miles away.

Libby Gober, the City Hall staffer who works closely with the citizens committee, said the view of council and the panel is that anyone who comes to an event from outside the city limits is a visitor spending money in Columbia that he or she might not otherwise spend.

It remains to be seen how practical the suggestions will be considered.

When Cardenas completed his report to City Council, Mayor Steve Benjamin half-jokingly said, “Doctor Cardenas, I recommend right now that run as fast as you can ... back to the ivory tower.”