Editorial: The Hotel Tax Recession and the Ballpark

Original artist renderings of the then-proposed ballpark in 2015/Provided

By Thomas Warren III, Editor-in-Chief

I remember sitting in a City Council meeting in 2015, listening to municipal officials in Amarillo discuss the funding structure for the then-proposed ballpark. I remember listening to individuals claim they would offer private donations. I remember hearing officials say there was more than enough revenue in the way of Hotel Occupancy Tax collections to cover debt service on the ballpark and parking garage, as well as shortfall at the Amarillo Civic Center Complex.

An ad posted by former City Councilman Brian Eades’ campaign Facebook in 2015/Photo by Facebook

I remember the 2015 ballpark referendum when it was said that Amarillo taxpayers would not have to pay a single penny for the ballpark. I remember a campaign ad put online by then-Amarillo City Councilman Brian Eades, claiming the ballpark would be funded 100 percent through a combination of Hotel Occupancy Tax collections and private donations.

I remember the Vote For Amarillo campaign, which was pushing the ballpark in the 2015 election, claiming that the venue would not be funded by taxpayers. In fact, an ad that very group said, “Visitors to our city are funding this. Not our residents.” I remember Dr. Paul Matney, the spokesperson for the campaign, saying in a television commercial, “Best of all, no property taxes will be used for this project.”

I remember all of those things. However, as we are learning now, it looks like the carriage our politicians and media personalities sold us might soon turn into a pumpkin.

On Tuesday, the Amarillo City Council had a meeting broadcast via Zoom in which Hotel Occupancy Tax collections were discussed. Due to the COVID-19 pandemic, revenues which were originally projected at roughly $6.4 million are now expected to come in at just over $3.9 million for the 2019-2020 fiscal year. This means that just $834,435 will be available for ballpark and parking garage debt service and Civic Center improvements for this fiscal year, while annual debt service on those two projects will cost roughly $3.18 million.

An ad used by Vote For Amarillo to support the ballpark in 2015/Photo by Facebook

What an interesting turn of events.

It is incredibly fascinating that just five years ago, we were told there were no worries about Hotel Occupancy Tax collections and their ability to fund the ballpark and parking garage. Even when the price tag went up under future City Councils, we were told there would be no problem making the debt payments with the revenues available.

Now, City officials are saying even without enough revenue to cover the deficit, they can fund the debt service through a surplus of $2 million.

That is simply not good enough.

This COVID-19 pandemic has wreaked havoc on the economy, most notably tourism. We depend on tourism dollars to fund our HOT collections as a city. This virus will not simply disappear in August and then everyone will start staying in hotels again. This virus does not respect the boundaries of the City of Amarillo’s fiscal year budget.

Once the surplus is robbed to pay for this year’s debt service, what happens if we have this kind of deficit again in 2021? You cannot keep robbing the cookie jar and expect that the money will replenish itself. I may not be a certified financial planner, but even I know that plan will not work out.

So, what’s next? What will happen if this recession continues months or even years? How will we pay the debt service then if there is not enough revenue to cover the cost? Will Amarillo taxpayers see their tax dollars used to pay for this project even after they were explicitly promised by the politicians who peddled this project in 2015 that they would not see a single dime of their money used to pay for this venue?

I am truly concerned about this situation. We are in danger of a real financial crisis if this is not figured out soon. If this project becomes a burden on the shoulders of the taxpayers because of the false promises doled out by politicians, then voters and taxpayers should remember who is responsible.

Let’s hope the City of Amarillo can sort this mess out. Otherwise, I hope the next slate of challengers can hold the incumbent City Council responsible for their financial recklessness in 2021.