Originally published in the Manchester Journal Oct. 25, 2017.
MANCHESTER — The Manchester Business Association says it needs more money to attract more visitors to town because visitors means more money spent in local businesses.
So it is requesting a portion of the town’s Option Tax to fund their marketing efforts in a proposal that would “certainly represent a big policy shift for the town” according to Selectboard Chair Ivan Beattie.The proposal was presented by MBA President Paul Carroccio at the Oct. 24 Selectboard meeting, resulting in an extensive discussion between Selectboard members and the many advocates of the association in attendance.
“We’re asking you to be our partner not only from a financial standpoint, but also in trust and a true commitment to what we’re doing, and our commitment to you,” Carroccio said. “We think that bridge needs to happen sooner rather than later.”
Carroccio went on to outline the similarities between the goals of the two entities, particularly when it comes to economic development; cultivating industries like tourism, arts and culture, and food; supporting entrepreneurship and business development; and enhancing the quality of life for residents and workers.
“`Incentives and partnerships can also be appropriate ways to accomplish goals. As in many human endeavors, progress is often best achieved through a balanced approach combining incentive and encouragement with regulations and restrictions,'” Carroccio said, quoting portions of the 2017 Town Plan. “`Implementation can also occur through direct action taken through citizens and leaders in the community.'”
Carroccio went on to outline the progress of the MBA over the past seven months, during which the organization has formed a board, raised funds, outlined a marketing plan, and opened the visitors center.
Still, the organization hopes to garner more public support in financing their efforts.
“We’ve successfully been able to sell advertising on the website to Manchester businesses, and we believe we can raise $50,000 to $75,000,” Carroccio said. “We also believe that the town can partner with us, and share in the upside of the Option Tax.”
“Historically of course, we’ve never allowed that to be tapped for any purpose other than to stabilize property taxes,” Beattie said. “That’s been the primary goal, and the only goal, of the local Option Tax.”
Beattie also pointed out that while local businesses are “a pastor for that revenue,” it is the patrons of those businesses — often visitors to the area —that pay the tax.
“If option taxes are up, that means revenues for local businesses are up which is good for everybody,” Beattie said. “But the businesses are benefiting from the increases in their revenue. It’s important to note that business property owners all benefit from lower property taxes as well.”
“Keep in mind that historically, the voters authorized it for tax relief,” said Vice-Chair Wayne Bell. “I think the town’s already a significant partner through its investments in infrastructure and services every day.”
Regardless, the proposal bears no risk for the town, asserted Carroccio — barring outside impacts that the organization couldn’t control, like a national or international recession.
“When there’s a surplus we know it goes into the property tax relief fund, and when you have deficits it comes out of that. We’re anticipating that it’s only going to go up in the next 10 years,” Carroccio said. “With that, we believe that the town should always get what it’s created in the Option Tax. It should also get an inflationary adjustment, and we added a two percent buffer on top to kind of catch that. If there’s any deficit years, it allows it to continue to fund that relief fund.”
With the town maintaining the buffer provided by the property tax relief fund, extra revenue from the Option Tax provided by the MBA would also be matched by local donors, according to Carroccio.
“After that inflation and the two percent, we’re proposing that the MBA pick up everything from five percent up to 15 percent,” Carroccio said. “After that, the town continues to benefit.”
Carroccio hypothesizes that revenue will grow starting next quarter, as internet sales begin to become a factor in the Option Tax.
“We don’t know how that will impact it,” said Carroccio. “The way we feel is, why not use those dollars from the internet companies to market our own local companies to produce more sales locally?”
As the MBA continues to draw more visitors to the Manchester community, said Carroccio, revenue from the Option Tax will grow in turn.
“The thought here is that as revenues in our town grow from visitors coming here, this number grows — we all know that,” Carroccio said. “It doesn’t increase tax dollars to the residents, it uses visitor spending revenue to market ourselves, it uses internet company dollars to market ourselves locally, and it helps us market our brand without costing the town more.”
Nonetheless, the proposal will ultimately be left up to Manchester’s voters if approved by the Selectboard.
“There are so many avenues that we need to look at, and one thing to remember is that the taxpayers are the ones that will vote on this. They need to see results whether it be financial or in their tax control,” said Selectboard member Steven Nichols. “It can’t just be seen on paper.”
“It’s a very creative idea, and I’m open to the discussion,” Beattie said. “I think this may be one of the most important requests we have to consider this year. This would certainly represent a big policy shift for the town, so that requires extra consideration.”
Reach Cherise Madigan at 802-490-6471.