Madison’s Room Tax Commission, the panel that distributes funding for tourism and arts initiatives, is facing a substantial budget shortfall in the coming years after spending down a surplus that accumulated after the COVID-19 pandemic, Isthmus reports.
Dave Schmiedicke, the city’s finance director, said that current projections show the exhaustion of the surplus by the end of next year. By 2027, the deficit would total an estimated $1.3 million.
The Room Tax Commission’s six-person body receives taxes collected on stays in hotels, Airbnbs or other transient lodging in Madison, which are currently set at 10%.
The commission distributes revenue from those stays. State law dictates that a maximum of 30% can be funneled back into the city’s general fund, and the remaining 70% must be put toward activities and organizations that bolster tourism.
A unanimous commission vote Wednesday allocated $23.2 million in 2026 funds, including:
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$6.7 million for the Monona Terrace Convention Center;
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$6.59 million for Destination Madison;
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$2.28 million for Overture Center for the Arts;
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$1.03 million for Olbrich Botanical Gardens;
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$636,200 for Henry Vilas Zoo; and
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$102,000 for the Alliant Energy Center.
Funding for “tourism marketing, which goes mainly to local arts programs and grants for arts workers, was substantially lower at $308,700, and the commission diverted $250,000 that would normally go to city coffers to the Henry Vilas Zoo and Olbrich Botanical Gardens.
It also set aside $500,000 for its own reserve fund.
The city’s kickback after that was 27% of room tax revenue, or $6.22 million. An estimated $12,413 remains unassigned.
