On Tuesday, Madison’s Room Tax Commission voted unanimously to cut a total of ten million dollars in funding from the city’s tourism marketing and tourist-related operations.
As part of the cuts, the Commission voted to cut $2.8 million in funding to Monona Terrace and $895,000 from the Overture Center.
The slashes to the city’s hospitality and tourism branches come as Madison’s hotel room tax is predicted to drop by fifty percent in 2020, from about $19 million to $9 million, due to COVID-19.
Under state law, seventy percent of Madison’s hotel room tax revenue is funneled into the city’s tourism activities. The remaining thirty percent goes to the city’s general fund.
Sally Miley, chairwoman of the city’s Room Tax Commission, said at Tuesday’s meeting that the cuts represent the best compromise city officials could reach.
“I think this plan is not going to make everybody happy, which probably means it’s a good plan,” she said.
Overture and the Monona Terrace were already facing a difficult financial situation even before the cuts. The COVID-19 pandemic has put large gatherings, such as live events and conferences, on an indefinite hiatus.
Last month, Overture cut its overall staffing by sixty percent for the summer. According to Chris Vogel, Chief Financial Officer for the Overture Center, the estimated loss in revenue is over seven million dollars.
He says the events space has had to dig into its emergency reserve funding to stay afloat.
“We are currently using our reserves,” he said. “With no earned revenue, no cash flow; we’ve had to start spending into those reserves. And that’s why we had to make those dramatic cuts to both our personnel and our overhead.”
According to City Council President Sheri Carter, who also sits on the commission, the city’s hospitality and tourism industries are vital for the city’s future economic initiatives.
“This economic slump that we’re in is not for just this year, this is going to spill into next year too, and our hospitality industry has been the epicenter and has taken a direct hit,” she said.