In nod to Austin’s live music industry, City Council carves out more than $3 million in hotel tax funding

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The Live Music Capital of the World’s governing body will send millions of dollars in annual tourism revenue to its namesake industry, in a nod to growing affordability concerns among Austin’s musicians and industry professionals.

The “live music fund” will receive 15% of the 2% tax Austin levies on all hotel room stays within the city limits—known as hotel occupancy tax. Although revenue will be dependent on the performance of the hotel industry, city officials estimate the additional 2% tax will bring in $21 million per year, which means $3.15 million for the live music fund. Per state law, another 15% of occupancy tax revenue will be allocated to historic preservation and the remaining 70% will be spent on the Austin Convention Center.

The city levies another 7% tax on hotel rooms, revenue from which is similarly broken into 15% for historic preservation and 70% for the convention center, but the final 15% is sent to a cultural arts fund, which funds a variety of nonprofit art programs throughout Austin and from which the live music industry is not eligible to receive funds. Mayor Steve Adler emphasized that the new live music fund would specifically focus on the city’s commercial music industry, which is allowed by state law because the industry is central to city tourism.

Efforts to stimulate the local music community date back to 2016, when City Council passed its Music and Creative Ecosystem Omnibus Resolution, which committed the city to finding ways the government could intervene and help the industry.

Council members said the move was meant to differentiate and allocate specific funds between the city’s two art communities—visual arts and music—which have often battled to qualify for grants through the competitive cultural arts fund. Members of the music community said it was time for commercial music to receive both funds and attention.

“Austin is the Live Music Capital of the World; it’s not the chamber music capital, visual arts capital, performing arts capital, historic preservation capital of the world,” said Cat Whittington, chairman of the Austin Tourism Commission and a longtime member of the local music scene. “This small step in recognizing this commitment to the industry that is synonymous with the name of Austin, Texas, is critical to supporting an industry that is struggling under the economic forces of regional development.”

State law is strict as to what the money could be used for. Council Member Jimmy Flannigan pointed out hotel tax revenue specifically cannot be used on music venues. Whittington said there are various programs the music community has discussed, but she highlighted one in which the funds would go toward paying local opening acts who perform at local venues. Whittington said the program would help the bottom line for venue operators and ensure adequate payment to local musicians.

Council Member Natasha Harper-Madison said the establishment of the live music fund aligns with the city’s equity goals and endorsed the city’s $1.3 billion plan to expand the Austin Convention Center, passage of which allowed the city levy to the additional 2% hotel tax.

“We need to prioritize the support and investments we give to our working-class musicians and artists just as highly as we do big festivals here in Austin,” Harper-Madison said. “I truly believe that my intentions and those of my colleagues on the dais with using the convention center improvement to achieve these goals will provide meaningful support for our local musicians and artists.”

Patrick Butcha, executive director of the nonprofit Austin Texas Musicians, celebrated the progress the fund represents for the local music industry.

“This is historic—let’s make no mistake about it,” Butcha said.

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Christopher Neely
Christopher Neely is Community Impact's Austin City Hall reporter. A New Jersey native, Christopher moved to Austin in 2016 following two years of community reporting along the Jersey Shore. His bylines have appeared in the Los Angeles Times, Baltimore Sun and USA Today. He is a graduate of the University of Maryland's Philip Merrill College of Journalism.
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