Hotel tax bump to benefit live music

For the first time ever, the city of Austin is dedicating tourism tax dollars solely to live music.

The Austin City Council voted unanimously Thursday to contribute a portion of the recently approved increase in hotel taxes to musicians. The 15% slice of a 2-cent hotel room tax that the council earmarked for live music could generate up to $3.6 million a year and $40 million in the next decade for musicians, according to estimates from a political action committee promoting an expansion to the Austin Convention Center.

"I think this is a really special moment here," Mayor Steve Adler said. "I think this reflects who we are as a city. ... We will not remain the live music capital of the world if we do not support live music."

Another 15% of new hotel tax revenue from the tax rate increase would be dedicated to historic preservation. The remaining 70% — roughly $16.8 million a year — would go toward the $1.2 billion convention center expansion.

The change to Austin's hotel tax rate raises the amount paid per every dollar spent on hotel rooms and registered short-term rentals from 9 cents to 11 cents.

A portion of the revenue generated under the previous tax rate was already dedicated to the cultural arts. However, that money by-and-large goes to non-profit organizations like the Zach Theatre or Ballet Austin, though some of it might make it to local gigging musicians through events put on by those organizations.

Now, part of the tax revenue generated by the 2-cent increase will be dedicated to benefit solely local musicians.

"We are talking about our working class musicians — the people that are out there every night at our clubs and bars that might not be eligible for funds under a non-profit organization," said Patrick Buchta, director of the recently formed nonprofit Austin Texas Musicians.

The city's Tourism Commission chair Catlin Whitington said Thursday's action was something of an olive branch between the cultural arts community, which was already receiving taxpayer assistance, and commercial musicians, who usually got little to none of the revenue generated by hotel taxes.

"Austin is the live music capital of the world," Whitington said. "It’s not the chamber capital, visual arts capital, performing arts capital, historic preservation capital or the convention center capital of the world. This small step in recognizing this commitment to the industry that is synonymous with the name of Austin, Texas, is critical to supporting an industry that is struggling under the forces of regional development."

While it is unclear how this money will make its way from hotel room tax fees to the pockets of Austin's hefty community of drummers, guitarists, singers and the rest, Buchta suggested the city create a wage rebate program.

Essentially, he said, venues that regularly pay low or no money to performers would pay musicians more in exchange for a rebate check from the city to pay for the increased wage.  

The convention center expansion and the hotel taxes that would fuel it have been a major point of contention in local politics for the last several months.

In November, voters will have the chance to sharply reallocate millions of dollars of hotel taxes away from the convention center to support cultural tourism. The approval of that ballot item, Proposition B, would likely hamstring the proposed convention center expansion.