Published: May 14, 2008 11:20 pm            

Perdue's veto a blow to hotel?

Gov. Sonny Perdue on Wednesday vetoed the Georgia Tourism Development Act, which would have created tax credits for tourism-related development and perhaps help bring a hotel to the trade center. Trade center board chairman Harvey Neal called the decision “very disappointing news.”

“We knew today was decision-making day, that he could either sign it or veto it or let it become law without his signature,” Neal said of the governor. “We’re sorry to hear that.”

A similar bill passed the Legislature last year with no opposing votes in either chamber but was also vetoed by Perdue. He said then he objected to the bill because it included tax credits for commercial aquariums as well. He said tax bills should deal only with one topic.

The trade center authority last year signed a letter of intent with hotelier and developer John Q. Hammons to develop a 220- to 240-room Embassy Suites hotel at the trade center. Neal said in April that since Perdue’s veto of the bill last year that Hammons has been waiting to see what happened with the new legislation.

On Wednesday, Perdue issued a press release stating, “House Bill 1129 provides sales tax refunds for certain tourism-related projects. Anytime the state uses public funds to subsidize companies locating or expanding in Georgia, we have an obligation to ensure that the economic development returns exceed the investment. ... I am not persuaded that the fiscal costs of this legislation outweigh the potential benefits.”

Perdue said “the case has not been made that companies’ decisions to locate tourism attractions are based on tax incentives rather than traffic, demographics and other objective factors. Georgia will, therefore, likely not achieve the full benefit of net new jobs that are expected from this legislation.”

“For myself and the trade center board, we disagree with his conclusions because we think that the long-term benefits would far more than offset the loss of near-term revenue,” Neal said, “and that’s both in terms of tax revenue down the road but probably more importantly in total economic impact. And I think that’s maybe where the case wasn’t made well enough to him. Especially here in Dalton, we feel that the total economic impact would have been substantial.”

Perdue also expressed concerns that such legislation “could create a perceived entitlement for new and existing Georgia companies. Put differently, codifying potential tourism incentives sets a floor in negotiations, and I believe it raises the expectation for additional incentives. It is preferable to handle each project on a case-by-case basis, which may include — with the approval of the General Assembly — some of the types of incentives provided in House Bill 1129. Given these concerns, I cannot support and therefore veto House Bill 1129.”

Neal said the trade center board has already appointed a committee led by Dan Rogers to approach Hammons and his organization “when we knew what the status of the bill was. We plan to still approach him and to, No. 1, let him know we’re still interested and see if he has any interest without that legislation, or if he or any other quality developer would be interested, but only with that tax incentive, we may have to go to the local legislative members to try to sponsor a special purpose piece of legislation to help us.”

Neal, who came to Dalton from Nebraska, said that is one of the differences he sees between the two states.

“I followed legislation most of my adult life in Nebraska and I guess that’s one of the biggest differences, the number of bills that go through the (Georgia) Legislature each year for just one specific item or specific location,” he said. “It’s really unusual. I guess that’s what we may have to try to work on with our legislators instead of an overall bill, just something specific strictly for the trade center.”

        

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