County council OKs food and beverage tax proceeds for convention center debt

At its regular Tuesday meeting, Monroe County councilors approved a $300,000 appropriation of food and beverage tax revenue to help make debt payments in connection with the county’s convention center.

The debt covers renovations and land acquisition that have already been made. It’s not related to the planned future expansion of the center, which is still part of city and county plans—even if it has been on hold during the pandemic year.

Bloomington mayor John Hamilton’s state of the city address, given on Feb. 25, mentioned the convention center expansion as a question: “What is the future for the convention center and its planned expansion?”

The money approved by the county council on Tuesday will cover a bit under two of the $159,000 quarterly debt payments. The county’s food and beverage fund balance, as of the first of the year, was more than $600,000.

The use of the county’s share of food and beverage proceeds for debt service on the convention center was recommended by the food and beverage tax advisory commission at a January meeting. 

Historically, it has been innkeeper’s tax revenues that have been used to pay the convention center debt service. The innkeeper’s tax is 5-percent charge on lodging in the county.

But innkeeper’s tax revenues have been hit hard by the COVID-19 pandemic. Food and beverage revenues are also a down due to the pandemic, but not as much. That’s why the convention and visitors commission was looking to tap food and beverage proceeds to cover some of the debt service.

At Tuesday’s county council meeting, Mike Campbell, who serves on the county’s 5-member convention and visitors commission (CVC), said the group would be approving the claim on a quarterly debt payment at its meeting next week. So the county council’s approval of the appropriation was timely, Campbell said. Campbell serves on the CVC as the associate director of Indiana Memorial Union.

Convention and business center revenue from event bookings has also taken a hit during the pandemic year. At Tuesday’s county council meeting, Talisha Coppock, who is executive director of the Monroe County Convention Center, gave county councilors an idea of the impact. Coppock said, “March 14 will be forever in my mind. We cancelled $400,000 worth of business in one day—we could hardly keep up with the telephone calls.”

During the pandemic, Coppock said, the convention center has been hosting only some smaller business meetings. The convention center has also been providing space for blood drives and the county health department’s COVID-19 vaccination clinic at no cost.

Overall, food and beverage tax revenue was down in 2020 compared to 2019, due to the impact of the COVID-19 pandemic. The combined city and county monthly average of $232,722 collected in 2020 was 81 percent of the $287,267 monthly average collected in 2019. That made for a year-over-year drop of $654,546—from $3,447,210 to $2,792,664.

The impact has been less on the county’s share of food and beverage tax proceeds.

The average of $28,790 per month in 2020 for the county was about 90 percent of the $32,078 monthly average for 2019.

The average of $203,932 per month  in 2020 for the city was just under 80 percent of the $255,190 monthly average that was collected by city businesses in 2019.

Revenues from the countywide 1-percent tax on prepared food and beverages are controlled by the city or the county government, depending on the location of the business that collects the tax. Inside the city limits, the use of the proceeds is determined by Bloomington government. Outside the city limits, it’s the county government that decides how it is spent.

That arrangement works out generally to about a 90-10 split between Bloomington and Monroe County government.