The Effingham City Council discussed the possibility of implementing stricter enforcement of the city’s amusement tax. While the tax is on the books, the city has been lax on enforcing it and has exempted many organizations, such as the Effingham Performance Center. City ordinance indicates that the tax is a 5% fee on each ticket sold with 60% of that revenue going into the general fund and 40% going into tourism.
According to City Administrator Jim Arndt, if the tax were to be implemented once again, that revenue could be used to assist amusement organizations when they come to the city with requests for funding. The large amount of requests for events has put a strain on the Tourism Fund, which is beginning to be depleted.
For example, during Tuesday’s meeting, Micheal and Blake Yager requested $30,000 to help improve Mid America Motorworks’ outdoor concert venue. While the city council was supportive of the proposal, those funds would have to be drawn from the struggling tourism fund. The city is, as of now, is not collecting the tax on the upcoming Luke Bryan Farm Tour Stop in Effingham on October 15th which has sold over 14,000 tickets at $49.00 each. Commissioner Kevin Esker pointed out during Tuesday’s meeting, that if the tax were collected on those ticket sales it would cover the cost of the Yager’s request.
“We’re looking now to see if we can shore up our revenues,” said Arndt, “to make sure we can meet the needs of our community in the future. Now this a tool that’s in place, but just not effectively applied.”
The cost of the tax would fall on consumers and the city council expressed concern that the it would put undue competitive burden on groups wanting to do business in Effingham. Other municipalities already enforce similar taxes.
The city council has not yet made a decision on whether to enforce the tax or if those previously exempt would remain so, but has directed city staff to look into possible action.