Sonoma’s Tourism Improvement District (TID), a non-profit organization operated by representatives from the hospitality industry, was established seven years ago for the sole purpose of providing funding for the promotion of increased tourism to Sonoma. It is a primary source of funds for the Sonoma Valley Visitors Bureau.
TID funding is generated through the imposition of a two percent fee added to room charges at all lodging types licensed within the City of Sonoma. Last year, that funding neared $800,000. Under the charter of the TID, spending of revenues is allowed for promotional purposes only, such as advertising in print media, on radio, and online. A small portion of TID spending is used for decorating the Plaza with banners, or contributing to public events that also are enjoyed by tourists.
The underlying idea of the TID is that Sonoma must compete with other areas, like Napa or Healdsburg, or it will lose out on tourist dollars. If occupancy increases, the reasoning goes, so will the city’s hotel tax collections. Hotel taxes are generated by a separate twelve percent Transient Occupancy Tax (TOT) charged to lodging guests by the City of Sonoma, and placed in the city’s General Fund; an additional one percent has recently been added to fund the city’s Affordable Housing Trust Fund.
In normal times all of that is well and good; when the tourist economy is running smoothly, jobs are created and all sorts of hospitality-related businesses do well, generating additional tax revenue for the city through sales taxes and business growth. But these are not normal times.
The Coronavirus pandemic has brought the hospitality business to a stand-still, and all the other businesses that are linked to tourism have shuttered themselves. While the City of Sonoma has not yet released deficit projections, we suspect they will be devastating; if the shelter in place rules continue into the summer, the city’s emergency reserves will be gobbled up fast. We urge the city to keep citizens informed of the projected economic impacts of COVID-19.
Local job losses are incalculable and it’s likely that many businesses will not survive. Although Small Business Administration loans have been funded by federal legislation, getting those loans will take time, and many smaller businesses don’t have the expertise or time to apply. This is a life-or-death situation for the businesses and workers in Sonoma Valley.
It’s time for the TID to quickly revise its rules so that whatever funds remain from TID collections to date get used to directly help the many local employees who have been laid off. Now is not the time to use money for promotion; now is the time to save lives threatened by a total loss of income. Tourism has come to a halt but workers have bills to pay and families to feed.
The TID, with a board of hospitality industry professionals, is an independent entity not answerable to the city or county. Amending its charter, in this time of crisis, might be as simple as some word changes in the by-laws, or require approval of the lodging operators who voted for its creation; either way, it’s doable.
The TID should immediately develop and implement a program of direct assistance to hospitality workers through grants to pay rent and meet other financial obligations. Lower-paid workers are the backbone of tourist-serving businesses, and they deserve help now.
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