By Randy Arrington
LURAY — New state legislation and a desire to directly involve key stakeholders lead to the recent formation of a committee to offer recommendations on how to allocate more than $1.1 million in anticipated Transient Occupancy Tax (TOT) funds over the coming year.
Page County’s lodging tax showed five consecutive year’s of growth in revenues until the COVID-19 pandemic shut down most travel and entertainment venues last year, including a mandatory short-term shut down of local rental cabins last spring. However, the 5-percent tax on rental cabins, rooms, campgrounds and other tourist lodging still generated about $800,000 compared to the original projection of about $1 million.
Breaking a more than decade-long trend, the Page County Board of Supervisors voted to keep the majority of those funds rather than distributing it among 21 entities throughout the county that had received TOT funds to promote tourism and events in FY2020. While 2 percent of TOT funds are required to stay in the county’s general fund, the supervisors decided to keep about 40 percent, or $320,000, in the general fund. They used another $212,000 to fund a position in the Economic Development and Tourism office and tourism initiatives by that office. The Luray-Page County Chamber of Commerce was the only other entity to receive any TOT funds in FY2021, an allocation of $255,000. The Chamber relies on TOT funds for a bulk of its annual budget.
On May 1, new legislation changed state law regarding the collection of lodging taxes. The levy was previously reserved for cities and towns, and only 20 designated counties. The new law now allows all counties in the commonwealth the ability to impose a transient occupancy tax. A similar change was made recently to the state’s regulations regarding the levy of a cigarette tax.
The new committee charged with reviewing requests for TOT funds in Page County will be meeting soon to begin reviewing more than two dozen applications. The six-member group serves only in an advisory capacity. Final approval of the allocation of any funds still rests with the supervisors, who are expected to begin dispersing TOT funds later this summer.
Initially, the committee was to be comprised of five members — one from each magisterial district. However, board chairman Morgan Phenix stated at a June 1 meeting that he wanted to add a sixth, at-large member because the committee “needs someone who can overcome the pressure of political appointments.” The other five board members were ready to submit names for the committee on June 1, but Dr. Phenix was not. So, the issue was pushed to the June 15 meeting, where the following vacation rental owners were appointed by the board of supervisors:
• Seretha Judy — District 1
• Karen Riddle — District 2
• Randy Howan — District 3
• Bart Price — District 4
• Charlie Jenkins — District 5
• J.D. Cave — At-Large
The formation of the committee was recommended by the county’s new director of Economic Development and Tourism Nina Fox, who stated earlier this month that she “took a deeper look to see how we can be more compliant” with the new legislation. She also noted that the key stakeholders, who pay the most in lodging tax and are the most affected by the allocation of TOT dollars, should have direct input in the process.
Each committee member is appointed to a two-year term, with the potential for a two-year extension. The four-year limit for service on the committee is aimed at keeping a rotating membership, allowing more stakeholders an opportunity to get involved in the process. The appointments are unpaid, volunteer positions.
The anticipation is that the committee will meet on a quarterly basis and make recommendations to the board. The committee could also lead to the formation of a Tourism Industry Advisory Group. State law requires localities collecting lodging taxes must consult with a local tourism industry organization about how to best redistribute those funds. Currently, the county says they use the Chamber’s Tourism Council to fulfill that requirement. The new tourism advisory group could also fill that role.
One aspect of the TOT allocations that could change over the next year is the amount given to the county’s three towns. The topic was discussed by supervisors on June 1 when District 4 board member Larry Foltz showed dismay over “how much the towns get.” It was noted that the Town of Luray collects its own lodging tax, while the towns of Stanley and Shenandoah do not. No decisions were made and no directives were given, but the conversation among supervisors seem to indicate that there may be adjustments to the amount of TOT funds traditionally allocated for the county’s three towns over the next year.