With hotel taxes falling sharply, Miami-Dade’s tourism bureau will cut payroll by 3 percent to combat its worst budget crisis since the 2001 terrorist attacks.
The tax-funded Greater Miami Convention & Visitors Bureau last week imposed the pay cut on all employees, President William Talbert III said Wednesday. He said if the tax situation worsens, more reductions will follow.
”We’re cutting back everywhere we can,” said Talbert, who is taking a 6 percent pay cut himself. “This is really uncharted waters.”
The emergency pay cuts reflect the growing anxiety surrounding South Florida’s tourism industry as it suffers a sharp downturn in travel spending.
The worries are gaining more urgency as Miami-Dade commissioners approach a Feb. 13 vote on a $609 million baseball stadium that would be partially financed with one of the hotel taxes that funds the tourism bureau.
The tax, a 2 percent surcharge on room rents for hotels on the county mainland, has fallen $415,000 since September. That amounts to an 8 percent decline, roughly equal to the 5 to 8 percent slide for the county’s other two hotel taxes, including one also charged to guests in Miami Beach hotels.
Miami-Dade plans to pledge future hotel taxes to $297 million in stadium debt, and The Miami Herald recently found that current revenues won’t be enough to pay back the loan and fund current obligations and tourism campaigns. That leaves Miami-Dade counting on a strong rebound by the hotel industry, even as hoteliers express growing anxiety.
”This is a bumpy winter with an unpredictable summer,” said Stuart Blumberg, a critic of the stadium plan and president of the Greater Miami & the Beaches Hotel Association.
Tourism bureaus in Broward County and the Keys do not plan similar cuts, executives said.
Along with vacationers staying home, corporate travel has dropped sharply. On Wednesday, The Wall Street Journal reported that Goldman Sachs had canceled a conference for hedge-fund managers at Aventura’s Fairmont resort out of concerns the getaway would seem too lavish amid a banking crisis.
Taxes on mainland hotel restaurants and bars fund about 25 percent of the Visitor Bureau’s $18 million annual budget. Thanks in part to a drop in corporate events, that tax plunged 22 percent in December, its worst showing since September 2001.
Talbert said the bureau has already cut travel expenses and other costs, but does not plan to reduce spending on convention sales or tourism advertising campaigns.
”Our cuts are targeted to have little or no negative impact on the sales side,” he said. But he added: “If we have to lay off staff, we’ll do it.”
A bureau spokeswoman said Talbert’s new salary would be $258,000. Tax records for the nonprofit bureau show he received $366,000 in total compensation in 2007. The bureau receives about 93 percent of its budget from tax dollars.
Bill Anderson, head of research for the bureau, said the December restaurant numbers took him by surprise. But he attributed much of the slide to local companies canceling the holiday parties typically held in hotel ballrooms.
He said a separate tax on mainland restaurants outside hotels grew 8 percent in December. Anderson said he doubts the hotel-restaurant tax will drop by double digits again but “you probably will continue to see declines.”