Leader Blues

Tuesday, December 19, 2006

EDITORIALS>>Taxpayers ripped off

We confess that we never much liked the advertising and promotion taxes that are collected by the larger cities to try to lure convention and tourist business, although we weren’t absolutely sure why. Cities from Little Rock to Cabot collect the tax, and now Jacksonville is thinking about it to beef up its tourist attractions, particularly the military museum.

Let’s hope our area cities make better use of the money than the folks over in Little Rock, where the convention and tourism people have entertained themselves more than tourist officials from out of state.

It’s always been a vague distrust that the municipal promotions were very effective and that the impact of convention business on the local economy was as spectacular as the convention bureaus always calculated.

It also seems a little improvident to tax ourselves to promote conventions when cities and counties have such palpable needs as streets, policemen and jails that we cannot afford. Thanks to some superb reporting by C. S. Murphy in the Arkansas Democrat Gazette, now we have better grounding for our uneasiness about the efficacy of the “hamburger tax.”

The Little Rock Convention and Visitors Bureau, the same agency that handed its retiring director a new car at public expense as a going-away token a while back, collects $12 million a year from the tax and spends it on — what? It is impossible to say from the public records except that large amounts go to businesses owned by members of its governing board.

The newspaper recounted a raft of conflicts of interest in the bureau’s operations, such as big parties thrown at two restaurants owned by Mary Beth Ringgold, chairman of the commission.

It spent $141,000 at the restaurants, Cajun’s Wharf and Capers, in three years. The agency often ignores the city law that requires bids on purchases larger than $25,000, hands out credit cards to employees willy-nilly and imposes no restraints on their use and spends large sums without formal authorization from the commission, which does not seem to care.

Here are the figures that must nettle Little Rock taxpayers: The bureau has 105 full-time employees, four of them earning more than $100,000 a year, and 75 part-time employees. Compare that payroll to the same bureau for the city of Houston, Texas, at more than 2 million the fourth largest city in the United States. Houston’s bureau has only 83 employees — and it keeps up with its money, too. It lands many more conventions than Little Rock, too.

Money, large sums of it, is spent almost whimsically. The bureau laid out $500,000 of the taxpayers’ money wining and dining and generally coddling a fraternity, which eventually did hold its convention in Little Rock.

Fewer than 1,300 people registered for the convention. The justification was that the bureau figured that the conventioneers would spend $20 million with Little Rock businesses.

If they did, most of them would have had to beg for bus fares home.

Municipal convention and visitors bureaus are semi-autonomous agencies. They would like to remove the “semi-” so that there are no controls on or accounting for how they spend the taxes.

Clearly, what is needed is the opposite: strong statutory controls on spending the tax, mandatory independent or legislative audits of the collection and disbursement of the tax and perhaps flexible authority for cities to divert tax receipts for more pressing needs. Could we suggest county jails?