AUSTIN (KXAN) — A hotel occupancy tax (HOT) increase is being drafted and is expected to be presented to the City Council on Thursday.
If approved, the city’s 7% rate would increase to 9%.
The extra revenue generated above 7% would be set aside and placed in the “Capital Improvement Plan For Convention Center Expansion” specifically and only for expansion construction or debt service payments for debt issued for construction of the Convention Center Expansion.
According to a release from assistant city manager Rodney Gonzalez, the HOT increase is a necessary component to finance the proposed convention center expansion. Gonzalez said the increased HOT would allow the expansion for the convention center to be cash-funded as opposed to debt-funded. He claims this would reduce overall interest costs on the project.
Gonzalez says the financing model for the convention center project, which includes the increased HOT, allows for fund allocation toward arts and historical preservation.