As a result, I went to the state comptroller’s site and crunched the numbers. The comptroller’s office only provides a breakdown, by month, for one year. However, they provide a quarterly data set from 2005. As you know, the El Paso two percent additional HOT tax went into effect on January 1, 2013. Therefore, I believe it would be fair to compare the two last years of the HOT tax to the last two years before the two percent went into effect. Therefore, I looked at the total Taxable Hotel Receipts for the quarters in 2011, 2012, 2013 and 2014. I also compared the taxable receipts to the total receipts reported to the state comptroller. I did this because I was curious to see if there was an increase in exemptions as a result of the higher tax rate.
Before I share with you the results from my analysis, let’s take a moment to go back and look at what the city’s projections were. According to the June 26, 2012, Powerpoint presentation to city council (page 101), the HOT taxes were expected to generate about $2.6 million towards the ballpark in 2013. In 2014, the HOT taxes was supposed to generate about $2.7 million. In the Preliminary Official Statement Dated August 13, 2013, the document the city used to sell the bonds to finance the ballpark stadium debt, the city disclosed (page 17) that it projected generating $1,680,000 in 2013 HOT taxes.
According to the State Comptroller’s figures, the city actually generated $2,554,945.03 from HOT taxes in 2013. This is about what the city projected in the Powerpoint presentation of 2012. This was an increase of about $875,000 from the amount projected in the bond documents. As I have previously written, the city acknowledged from the onset that it would be short in meeting the debt service for the first few years, at least through 2019. It is unclear at the moment how much the city has needed from the general fund to make the debt payments but the fact is that the HOT tax revenues were substantially up from what was projected in the bond documents.
As you can tell from the graph, except for a dip in the second quarter of 2013, the HOT tax revenues from the 2% city tax increased through the second quarter of 2014. It then started to decrease in the third and fourth quarters, yet it remains above the historical trend from 2011.
From the Taxable Receipts vs. Total Receipts graph we can tell that the hotel occupancy rates have trended up since the implementation of the city’s ballpark hotel tax. In the third quarter of 2014, there was a significant increase in total revenues from hotel usage; however, the taxable portion remained steady, signifying a larger non-taxable usage of the hotel rooms during that period.
For 2015, I only had access to the data from January. Comparing the total taxable receipts of about $10.5 million in 2015 to 2014, there was a drop of about $162,000, or about $3,000 in revenues for the city. The January numbers are insufficient to allow us to predict the revenues for 2015, however the bowling tournament will be in the city for the next few months and it is expected that the hotel occupancy rates will increase as a result.
From the data, I was able to gather, it seems that the city’s projections about the HOT taxes in 2012 and 2013 were lower than the actual numbers show. This is good for the taxpayers of the city.
Later in the year, I will update you again on the HOT tax revenues, as more data is made available by the state comptroller’s office.