Living Local - Visitors are extremely important to our community and our City’s annual budget
Fall has always been my favorite time of year in Manhattan. The temperatures and colors slowly begin to change, which make for enjoyable walks with our family dog, Hutch. There are also the not so subtle reminders of fall, like back to school, football, and busier roads, shops and restaurants in Manhattan. Students are back in town and there is a certain excitement around Manhattan that follows. It is certainly an exciting time of year.
The beginning of Fall also marks the end of the City annual budgeting sessions. This past week, the City Commission approved the 2025 budget. The City budget is large and complex, but in short, the Commission approved a total City budget of $229,659,263.
One source of revenue in the City’s budget is the Transient Guest Tax (TGT), and something I am more acutely aware of in the Fall when Manhattan experiences the bustle of K-State Football, events, and families visiting their college student. Transient guest taxes are defined as a tax (in addition to the sales tax) on the rental of rooms, lodging, or other sleeping accommodations. The guest tax applies when there are more than two bedrooms furnished for the accommodations of guests, and when the room is rented for 28 consecutive days or less. It is sometimes referred to as a “hotel tax” or “bed tax”, and something you are likely familiar with having paid in your travels to other cities. TGT’s are a way for a city to generate revenue, and put those funds back into programs that encourage more tourism, sales for local businesses, and more sales tax revenue for your community.
The City of Manhattan imposes a 7.5% TGT. For comparison, Lawrence’s TGT rate is 6%, Overland Park is 9% and Topeka is 7%. In Manhattan, these funds have historically been budgeted to assist the Convention and Visitors Bureau, Downtown Manhattan, Inc and the Aggieville Business Association. These entities are then tasked with deploying those funds to not only bring more visitors to Manhattan, but create a welcoming environment that encourages visitors to spend more money. TGT taxes in Manhattan have also been used for Parks and Rec enhancements, beautification projects and expansion of our conference center. All things that make Manhattan a more attractive place to visit, host sports tournaments, or host conventions. One benefit of TGTs, is they are primarily paid by visitors to the community who are utilizing our hotels. However, that said, the TGT fund (and those programs funded by it) take a big hit when visitors aren’t visiting and staying in our hotels…i.e. COVID. For example TGT revenues in 2019 were just over $1.8 million. This dropped to $1.4 million in 2020 and $1.6 million in 2021. These drops impacted how budgets and how tourism programs were funded. Manhattan saw a nice bounce back in 2023 with TGT revenues close to $3 million.
What does all this mean? Visitors are extremely important to our community and our City’s annual budget. The more visitors we can bring to Manhattan, the more sales tax revenue and TGT revenue we receive, which of course means the more benefits our small businesses and community will experience. Later this Fall, the Museum of Art and Light will open, hopefully bringing in a fresh set of visitors ready to spend money in our community. Perhaps after touring the museum, they will enjoy the dining and shopping options in Manhattan, and maybe even stay a few nights. While TGT is a small piece of the overall City budget, it can do a lot for enhancing visitors’ experiences and driving sales tax revenue in our community.
Fall weather is in the air, kids are back in school, there is plenty of football, pumpkin patches, and a lot of hustle and bustle. Traffic may be heavier and lines longer at the stores and restaurants, but it is important to remember how valuable visitors are to our community and what brings them here. Manhattan is a great place to be in the Fall.
Tamara Burton l tamara@thealmsgroup.com l 913-484-0808
