Lakeway officials discuss hotel tax money allocation strategies

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During a June 24 special meeting, Lakeway City Council discussed strategies for allocating money in a growing line item in the city’s budget—the hotel occupancy tax fund.

“The reason I wanted to see this on an agenda is the amount of accrual we have had for so long with no agenda and no plan to look for ways to use it.” Council Member Louis Mastrangelo said. “Since I have been on council, we’ve had three requests, and all three requests don’t make the slightest dent.”

Lakeway’s hotel tax fund now sits at more than $5.1 million. Mastrangelo suggested the hiring of a person or firm to begin analyzing how the money could be best used. He added such a contractor for the city could help clarify what the money can and cannot be used for and be paid for with hotel tax funds.

So far, City Council has allocated $110,000 this year from the fund—$20,000 to the Lakeway Resort and Spa, $40,000 to the Lake Travis Film Festival and $50,000 to TexARTS.

The hotel tax fund consists of tax money collected by the city from hotels and by law must be used solely for the promotion of tourism.

During the discussion, Council Member Gretchen Vance suggested construction of a multiuse facility as one option to explore, and Council Member Sanjeev Kumar said information outreach is necessary to best establish where the money should be sent.

“I am not that worried, even if we keep collecting hotel tax money for a few more years and don’t spend it, so long as we have a strategy of what we will end up spending it [on],” Kumar said.

Council Member Steve Smith suggested it might be best to examine any needs within the hotel and lodging industry that may be shown in Lakeway’s comprehensive plan, due for completion this winter, and then make decisions regarding hotel tax fund allocation.

Mayor Sandy Cox agreed with Smith’s suggestion.

“I think we’re in a point right now where we don’t know quite where we’re headed,” Cox said, adding the comprehensive plan could provide valuable data to assess needs pertaining to the promotion of tourism.

Though no official action was taken during the discussion, council also discussed the issuance of information about the hotel occupancy tax on Lakeway’s official website.

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Brian Rash
Brian has been a reporter and editor since 2012. He wrote about the music scene in Dallas-Fort Worth before becoming managing editor for the Graham Leader in Graham, Texas, in 2013. He relocated to Austin, Texas, in 2015 to work for Gatehouse Media's large design hub. He became the editor for the Lake Travis-Westlake publication of Community Impact in August 2018.
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