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SALT LAKE CITY — Two counties in Utah used transient room tax revenue for projects not permitted under state law, but a new legislative audit found most counties comply with the spending rules.
And the eight counties the Legislative Auditor General's Office reviewed want state lawmakers to allow more discretion on how to spend the money. The audit also found that counties aren't submitting required reports to the state on the use of the funds.
The audit comes as counties have more and more room tax dollars at their disposal. Revenues increased 53 percent in the past five years due to increased hotel stays, according to the report.
Legislative auditors were tasked with finding out whether counties are spending the tax in accordance with state law. Auditors chose Davis, Garfield, Grand, Salt Lake, Wasatch, Washington, Wayne and Weber counties for the review.
Washington and Grand counties spent some of the revenue on their airports, which the law does not allow.
Washington County stopped putting money toward its airport bond after the mistake was discovered during the audit and now ensures that the funds go to its convention center. Grand County used the revenue for improving airport runways and remodeling the terminal in 2017 but hasn't since.
Counties can charge up to a 4.25 percent room tax. The state requires at least 47 percent to be spent exclusively on promoting tourism and 53 percent on tourism projects and dealing with impacts visitors have on communities.
Salt Lake County collected $76.8 million in room tax revenue from 2013 to 2017, followed by Summit County at $38.2 million and Washington County at $27.1 million. Morgan County had the least at $29,268.
Overall, the state brought in $240.3 million over that period.
The audit showed that Salt Lake and Garfield counties spent the minimum on promotion, while Wayne and Weber counties spent 62 percent and 61 percent, respectively.
Although most counties spent all their room tax money each year, Washington County had $10.6 million in the bank as of December 2017, according to the audit.
There may have been some confusion in the counties as to how much was required to be spent on promotion.
–Audit
Until the audit, the county did not realize that it still must split the money between tourism promotion and projects as outlined in the law.
"There may have been some confusion in the counties as to how much was required to be spent on promotion," the audit said, noting Wayne County using 62 percent on promotion.
The audit found few counties submit tourism revenue reports to the state. In fact, none of the eight counties in the audit turned in 2017 reports on time or at all. Auditors suggested the state tourism office be designated to oversee the reporting requirement.
Counties with national parks, such as Grand County, were "especially vocal" about wanting more flexibility in how they use the transient room tax, according to the audit.
Officials in those counties say they have more tourists than their roads and services like police or search and rescue can handle, and are reluctant run ads to attract more visitors. Grand — which has 2.4 tourists for every permanent resident — is considering raising local property taxes to deal with the tourist impact, the audit says.
The Legislature passed a law this year that allows counties to use up to 4 percent of their room tax revenue for emergency medical services in resort communities within their borders.
Vicki Varela, managing director of the Utah Office of Tourism, Film and Global Branding, agreed counties might be confused over how they're allowed to spend the room tax. If the office is chosen to oversee the spending reports, it would require a lot of follow-up time to ensure they're submitted on time, she said.
The Legislature might want to consider consequences for counties that don't meet the spending requirements or fail to turn in their reports, Varela said. She suggested counties must comply with the law in order to be eligible for cooperative market matching funds from the Tourism Marketing Performance Fund.
