City Of Duluth Make Recommendations For Tourism Tax Dollars

"We are expecting to collect 25% less in 2021 than we anticipated collecting this year in 2020," said Duluth Mayor Emily Larson.

DULUTH, Minn. – As the pandemic continues to hurt many parts of the Northland tourism industry Duluth city leaders are starting the process of deciding how tourism generated tax dollars should be spent next year.

Last year, about $12 million in tourism tax revenue ended up being set aside for Duluth community investments and to help pay for some of the city’s debt obligations.

Due to the pandemic, the tourism tax money generated for use next year will be significantly lower.

Tourism taxes in Duluth are typically collected on purchases for things such as hotel rooms, food, and beverages.

With fewer people traveling, there is now less money coming into the city through tourism taxes.

“We are expecting to collect 25% less in 2021 than we anticipated collecting this year in 2020,” said Duluth Mayor Emily Larson.

The City of Duluth is now recommending just over 9 million dollars in tourism tax revenue be budgeted for 2021.

About $700,00 from the city’s reserve fund will be added in to help provide additional money.

“We have worked hard to prioritize the commitments we have,” said Noah Schuchman, the chief administrative officer for Duluth. “It’s important especially next year that we are providing funding the extent possible to make sure the tourism industry is health and strong.”

The city’s current plan calls for 60 of the funding to pay for non-negotiable debt obligations.

This includes making additional payments on the tax bond used to pay for the construction of Spirit Mountain’s Grand Avenue Chalet.

“The layers of obligations and intertwinement we have with some of these organizations will require us to support them in this way. If not, it puts them at a substantially greater risk that also becomes a liability for us,” said Larson.

Other places the city is recommending tourism tax revenue investments in 2021 include the Clean and Safe team, the Lake Superior Zoo, and about $1.5 million to help advertise the city.

Several organizations that might typically make the funding list, like Hawk Ridge, will likely be left out of the tourism tax dollar distribution next year.

The mayor says it’s not about which organizations deserve funding the most, but about making overall wise choices.

“These decisions are not about where I would necessarily like to put the money, but it is about what makes the most sense for the city to use these financial resources to create less risk,” said Larson.

The Duluth City Council is expected to vote on the tourism tax recommendations on monday.

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