The Unified Government (UG) is considering changes to the Transient Guest Tax, which is the local tax on hotel stays. The proposal would raise the rate from 8 percent to 10 percent. It would also change the way the revenue is divided between Parks and Visit KCK. Commissioners discussed the item during the November 17 Administration and Human Services Standing Committee meeting.
The UG states that the current ordinance allocates three percent of the receipts from the tax to Parks. Another three percent goes to Visit KCK. During the meeting, legal staff said the wording may not reflect the commissioners’ original intent. They first discussed the proposal earlier this year.
Wendy Green, Deputy Chief Counsel, explained the difference. She said, “There is a distinction on whether you want three percent of the receipts derived from the tax or if you want three percent of the tax.” She said the second option would provide more money for both Parks and Visit KCK. “If it was three percent of the tax, it would actually generate more for each of those,” Green said.
The topic has been discussed several times in recent months, including questions about how projects will be identified. Commissioner Andrew Davis said he supports the higher rate and the three percent split but cautioned against listing specific projects in the ordinance. “I have some reservations on tying our department’s hands on specific projects,” Davis said. He also said he trusted the department’s work, adding, “I don’t necessarily have, particularly when it comes to our Parks Department, a fear of mismanagement or misuse of dollars. I’ve seen nothing but the opposite of that.”
A resident at the meeting asked for a clear projection of how much revenue the change would generate. Dr. Shelly Kneuvean, the UG’s Chief Financial Officer, joined remotely and provided figures during the meeting. She said, “Currently at the eight percent, the annual receipts are about 4.9 million, and every one percent is going to raise another 620,000.” She said raising the tax to 10 percent would increase total revenue. “The total that will be coming in at the ten based on our estimates is 6.2 million,” she said.
Under the proposed structure, three percent of the tax would go to Parks. Another three percent would go to Visit KCK. Based on the projections, that amount would be about 1.8 million dollars for each group.
The item also includes a two year sunset for the higher tax rate. After that, the tax would return to 8 percent unless renewed by the commission.
The committee supported using a percentage of the tax. They directed legal staff to revise the language for a future meeting.
