Travis County and City of Austin duke it out over hotel occupancy tax

An estimated $1.2 billion expansion of Austin's Convention Center loomed over City Hall Thursday. An item before City Council, raising the Hotel Occupancy Tax from 7% to 9% — that's money tourists pay for staying in Austin hotels — and Council wants to use it to expand the convention center.

A group called "Unconventional Austin" thinks expanding the convention center is a horrible idea, and they want the public to vote on it. "It's a phenomenal waste of taxpayer money, that would be committed for 30 years for construction, annual operating losses that are now exceeding over $40 million a year," said Bill Bunch with Unconventional Austin.

That group brought the City a valid petition so the "vote for a vote" essentially will be on the November ballot. A political action committee called "PHAM" gathered in front of City Hall Thursday as a foil to Unconventional Austin.

"There's always been zero funding for music in the history of Austin. We see this as the first real break, the first real chance for a change," said Cody Cowan with PHAM.

But those 2 sides aren't the only layer to this onion.

4 out of 5 Travis County Commissioners appeared before Council — not to weigh in on convention center expansion but to urge them to rethink their decision on hotel tax.

County Judge Sarah Eckhardt says it's time the City starts sharing the pie. "One of the hotel occupancy taxes available under the tax code has now gone to 9% from 7% so they intend to take that full increment," Eckhardt said.

With HOT funds, the County could put money toward the eastern crescent.

"The unfortunate thing that we continue to see is that significant parts of our community particularly low-income parts of our community are never invested in until they're gentrified. And this is unacceptable for us," said Commissioner Jeff Travillion.

The County is also hoping to use HOT for a revamp of the Travis County Expo Center. "The property is owned by the City of Austin actually and it's within the city limits of Austin on its eastern edge, so we very much want to see it redeveloped," Eckhardt said.

Mayor Adler says he's supportive of improving the Expo Center.

"The County has always asked and indicated a desire to be able to access one HOT funding stream, Chapter 334 and that option still is available with the action we take today once the City pays off the existing 334 debt," Adler said.  

The Mayor pointed out the county was asking for that debt to be paid off sooner rather than later.

"In fact the action that we're taking today makes it more likely that we can pay off Chapter 334 debt earlier because some of the money that's being escrowed that would be captured if the council votes to do this today could be put to that purpose," Adler said.