Tourism Commission wants more transparency on hotel tax funding decisions for arts groups

Members of the Tourism Commission have signaled they want more transparency from the Economic Development Department regarding how Hotel Occupancy Tax dollars allocated for music, cultural arts and historic preservation programs are used.

At its most recent meeting, the commission pushed EDD staff to provide an annual report of how all hotel tax revenue for those uses is spent.

The commission also considered forming a working group related to the use of those funds but opted to hold off until next year after the city receives an outside consultant’s report on three recently restructured programs for awarding arts grants.

At issue is the creation of those three programs – Elevate, Nexus and Thrive – that were created to prioritize racial equity and other demographics as well as creating funding opportunities for new arts groups and individual artists. That shift has drawn criticism from legacy arts groups going back to 2018 when the city made a sudden change in its criteria for evaluating applicants, which resulted in some groups seeing severe cuts or elimination of city grants after years of consistent funding.

The creation of the new programs began in 2019 with the city holding extensive community outreach to discuss and make the changes as widely known as possible.

EDD staff presented an overview of the funding process for its Cultural Arts and Historic Preservation programs. They noted that current hotel tax funding allows for awards to be given to only 36 percent of applicants.

One substantial change from previous years was the decision to move away from smaller awards to larger numbers of applicants based on their scoring. That switch was made to provide “more meaningful awards” in larger amounts to a smaller pool of recipients.

EDD Director Sylnovia Holt-Rabb said the outside evaluation of the three arts funding programs will be completed within the next year, and that the department is implementing several improvement and support steps. Those include hiring consultants to improve software and internal processes, securing more funding in the city budget for translation support to improve outreach and expanding training for panelists reviewing applications for awards.

The EDD discussion was loosely tied to a separate agenda item in which the commission discussed how the city can reach an agreement with short-term rental platforms that could bring an extra estimated $20 million per year in hotel tax revenue.

Chair Daniel Ronan said the city should increase the consideration of applicants’ artistic talent and impact along with equity when deciding on awards.

“I really value artistic talent and artistic expression and artistic excellence, and so I’m wondering how this factored into the criteria for those that you awarded grant funds to. … Also how this can be measured if we’re giving funds to individual artists where the economic impact comes in terms of getting heads in beds, getting people from out of town to then come here, stay a night in a hotel and generate more (Hotel Occupancy Tax) revenue,” he said.

Holt-Rabb said the city’s Vision 2023 five-year plan that prioritizes equity for all groups provided the framework for the restructuring of how arts grants and other programs give out awards and contracts.

“Not everyone has been at the table … so leading with racial equity and removing barriers to ensuring people feel included and not excluded, it’s all wrapped into the program guidelines and rubrics,” she said. “We train the panels in terms of evaluation to try to level set so that even if you don’t have a lived experience, you may understand where an applicant is coming from as part of the process.”

In considering possible remedies to the large drops in funding for some groups, commissioners discussed a move to a sliding scale or tapering off of award amounts to let groups improve their performance in equity and other criteria.

“I admire and applaud the objectives, but a lot of groups might not have been ready to make the shift as quickly,” Commissioner Michael Cannatti said. “It’s probably too late to suggest easing this in a little bit, but I think we’ve had a number of arts groups come here and say, ‘Wow, the funding disappeared,’ and it could be a real shock for a nonprofit. A lot of nonprofits are kind of shoestring type operations, not terribly sophisticated, and it’s difficult to recruit board members in the first place.”

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