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Committee discusses tourism funding, CVB allocation and potential hotel-motel tax increase
Summary
Staff reviewed economic development and tourism spending allocations, noting a forecasted $1.547 million contribution to the Convention and Visitors Bureau from the hotel-motel tax and prompting committee members to discuss whether to pursue a permissive increase in the tax to capture additional tourism revenue.
City staff summarized community and economic development spending and outside agency funding tied to tourism and the Convention and Visitors Bureau (Visit Franklin), telling the committee the city’s forecasted FY26 contribution to the CVB is roughly $1,547,000 (a portion drawn from hotel-motel tax receipts).
Staff noted the city’s hotel-motel tax revenue has set records in FY24 and was on pace to set new records in FY25. Committee members asked about the total CVB budget and the mechanics of the city’s contribution; staff said the county and city each provide 1% and that Franklin’s contribution is part of a larger regional funding pool.
Several aldermen raised the possibility of increasing the city’s hotel-motel tax rate toward the permissive 5% cap; currently the city levies 4%. One committee member said hoteliers they had spoken with were not opposed to a modest increase and urged staff to prepare analysis and ordinance language for a future work session. Staff replied that the city’s legal opinion is an increase can be implemented by an act of the board and that staff would provide further analysis and options for the board to consider within the overall budget conversation.
Committee members noted related work: a Cool Springs conference center and hotel study that city and county staff are preparing to evaluate the operating agreement for the conference center ahead of contract renewal in 2027; the planning and finance implications of any tax rate change would be part of subsequent deliberations.
No formal action was taken at the committee presentation; members asked staff to return with more detailed financial analysis and suggested incorporating the topic into budget and work-session discussions.
