Overall, hotel taxes make up a tiny share of the $1 billion-plus the county collects in revenue each year. Nonetheless, they have outsized political importance in Cobb, because hotel taxes paid by visitors were cited as a key justification for the county’s decision to help build the Braves stadium.
Feasibility studies estimated that a city of Mableton in South Cobb would collect about $1 million annually from its hotels, while Vinings, located just south of Truist Park, would receive over $800,000.
However, the total impact to the county’s stadium payments would be less because state law requires that the majority of hotel-motel revenue be spent on promoting tourism — not general expenses like debt payments.
For context, if the cities had been in place in 2020, the revenue diverted from the county would have wiped out the entire $419,000 contribution Cobb hotel visitors made toward the stadium.
Notably, the stadium isn’t the county’s first priority when in comes to the hotel taxes.
Today, the county spends much of its discretionary hotel funds to pay off bonds used to build the Cobb Energy Performing Arts Centre. Bill Volckmann, the county finance director, told the AJC that even if both cities are formed, “we feel like we can cover the existing bonds without an issue.”
In a good year, the county would likely have enough hotel taxes left over after the arts center payments to meet its expected $1.5 million contribution to the stadium bonds, as well. But in a recession — even one with less impact on travel than a pandemic — the county could be forced to lean more on local taxpayer contributions to make up the difference.
In total, Cobb pays $16.4 million a year in stadium debt, and county financial documents show contributions increased from Cumberland-area property taxes and the general fund in 2020, when hotel travel dipped. Figures for 2021 are expected to be released in the next few weeks, Volckmann said.
Future of tourism funds unclear
The cityhood movements could have ripple effects on other county programs.
Today, Cobb provides hotel-motel tax revenue for tourism to the Cobb-Marietta Coliseum and Exhibit Hall Authority, which manages the Cobb Galleria and the performing arts center.
The new city governments could continue to do so, or they could spend it on other tourism-related programs. The city of Marietta, for example, provides the tourism share of its hotel taxes to the Marietta Visitors Bureau.
The uncertainty comes at a tenuous time for the exhibit hall authority. It finished 2021 with a $780,000 budget deficit due to the pandemic, according to its annual report.
When asked how they planned to spend their tourism funds, representatives of the Vinings and Mableton cityhood movements said it would be up to future elected leaders.
“Vinings will still be very much a part of Cobb County, and we hope to have a great working relationship with the county,” Taryn Bowman, CEO of the Vinings cityhood campaign, told the AJC.
In Mableton — located 10 miles from the Galleria — some supporters hope the new city would use its funds to promote local attractions in South Cobb.
“I will say that we hope the city council will see the wisdom in spending the majority of the taxes to promote the city’s two large tourist attractions, Six Flags Over Georgia and Mable House-Barnes Amphitheatre, as well as events like the Taste of Mableton,” Galt Porter, a member of the South Cobb Alliance steering committee, told the AJC.