Should Tourism Taxes Fund Albemarle’s Conservation Easements?

By. Neil Williamson, President

In Wednesday’s (11/4) Albemarle County Board of Supervisors meeting, there was an exchange between supervisors regarding the potential funding of The Hatton Ferry Project in Scottsville.  After going back and forth one supervisor suggested the funds requested for the Hatton Ferry come out of the Acquisition of Conservation Easement (ACE) Program. 

It is a little known fact that since its inception the ACE program receives in hundreds of thousands of dollars annually from the Transient Occupancy (hotel) tax.  

hotel symbolThat’s right, every time a traveler chooses to rest their head on a hotel/motel/campground  pillow in Albemarle County a portion of their transit occupancy tax goes to fund county government purchasing development rights.

The occupancy tax was developed by the General Assembly for promotion of tourism and is limited by Virginia State Code regarding the use of these funds:

§ 58.1-3819. Transient occupancy tax.

A. Any county, by duly adopted ordinance, may levy a transient occupancy tax on hotels, motels, boarding houses, travel campgrounds, and other facilities offering guest rooms rented out for continuous occupancy for fewer than 30 consecutive days. Such tax shall be in such amount and on such terms as the governing body may, by ordinance, prescribe. Such tax shall not exceed two percent of the amount of charge for the occupancy of any room or space occupied; however . . .  Albemarle County, Nelson County, Mecklenburg County, Gloucester County, Spotsylvania County, Stafford County, Loudoun County, Bedford County, Cumberland County, Floyd County, King George County, Wise County, Botetourt County, Prince Edward County, Rockbridge County, Caroline County, Dinwiddie County, Page County, Wythe County, James City County, Franklin County, Tazewell County, Augusta County, Prince William County, Craig County, Prince George County, Patrick County, Pulaski County, Halifax County, Montgomery County, Carroll County, Northampton County, Amherst County, Giles County, Smyth County, and Greene County may levy a transient occupancy tax not to exceed five percent, and any excess over two percent shall be designated and spent solely for tourism and travel, marketing of tourism or initiatives that, as determined after consultation with the local tourism industry organizations, including representatives of lodging properties located in the county, attract travelers to the locality, increase occupancy at lodging properties, and generate tourism revenues in the locality. (emphasis added – nw)

The justification for this spending has been that tourists come to Albemarle County to see the wide vistas and open space.  Further,  parcels that have utilized occupancy tax dollars have been “highly desireable”  tourist oriented parcels.

The Free Enterprise Forum sees this legal nexus as tenuous at best.  It could be argued tourist come to Albemarle County because of its rich history, safe streets or the connection to Monticello none of these items are funded from the transit occupancy tax. 

The Free Enterprise Forum believes tourism is one of the cleanest and efficient forms of economic development in Albemarle County.  The Virginia Tourism Corporation commissioned a study in 2009 that found on the state level:

Every $1 Virginia invests in tourism marketing generates $5 in tax revenue for the Commonwealth. That’s a 5:1 return on investment.

What has been the calculated rate of return on investment of the transient occupancy tax dollars siphoned off for the ACE program?

Why shouldn’t this targeted tax collection be spent generating new business for our local tourism industry who collected the tax in the first place?

If Albemarle County is truly committed to tourism, it should reexamine the funding of ACE from the transient occupancy tax.


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