Councilors propose future work session to address concerns
By Molly Ann Howell
Managing Editor
Eight events were on the May 13 Gallup city council agenda seeking Lodger’s Tax approval. A majority of the events are scheduled for the summer months, so the council eventually decided to approve all the requests, but the topic still brought up a lengthy discussion, and the council discussed the possibility of holding a work session on the topic.
WHERE THE PROBLEM LIES
Many of the city’s long-standing events are supported by the Lodger’s Tax Fund. People who stay in hotels around Gallup pay into the fund. The tax comes out of the hotels’ daily rates. The tax is set at 5%, so if a person pays $80 a night, $4 goes to the Lodger’s Tax.
Event organizers then apply for grants out of the fund.
During the March 11 city council meeting, the city’s Tourism and Marketing Manager Matt Robinson warned the council that the Lodger’s Tax fund is depleting at a rather significant rate. Without funding, the city will no longer be able to support community-loved events.
“People are just not staying in hotels as much as they did before,” he said. “I think we were kind of artificially bumped through COVID … and now I think we’re back down to where we’ve been historically. And what I’m seeing in the trends is that our events are not driving [enough] overnight stays to justify the amount of money we’re putting into the events.”
The Lodger’s Tax item was originally only on the May 13 meeting’s consent agenda, but Councilor Sarah Piano, Dist. 3, pulled the item for discussion. She explained that she pulled the item because of her concerns about how the program is run.
She argued that the city doesn’t have straight-forward guidelines for the program, and that has caused problems.
“We need guidelines in place because we’re basically approving [events] willy-nilly,” she said. “We’re approving things because ‘It’s a good event, we like it.’ That’s great, but we are approving a lot of things that are not bringing in real tourism, and it bugs me.”
Piano said that the council and the Lodger’s Tax Commission needs to follow some set guidelines. She specifically called out the city paying for items events give away or sell, such as T-shirts, back numbers, hats, or other small items.
In 2021, the Lodger’s Tax committee and the city council had many discussions over what is considered a promotional item, and what they shouldn’t or shouldn’t spend Lodger’s Tax money on. At the time, council members argued that someone from out of state seeing a T-shirt with the Gallup logo on it serves as advertising for the city.
Councilor Michael Schaaf, Dist. 2, reminded his fellow councilors of the 2021 decision, and said that the city’s website hasn’t been updated with those new guidelines.
The councilors unanimously agreed that the website needs to be updated.
OTHER ISSUES WITH THE TAX
But an updated website doesn’t solve the city’s money problems regarding Lodger’s Tax.
Piano questioned why the city was financially supporting events that have been a part of the community for years.
“I’m not understanding why we’re spending so much money on events that should already be established at this point to bring in money,” Piano said. “… I guess I’m confused as to where our part comes in when we’re paying such a big part of their overall expenses….”
Robinson was able to show the council a breakdown of each events’ projected profits for 2025. Seven of the eight events looking for approval during the May 13 meeting reported their projected revenues to Robinson. He didn’t receive a response from Red Rock 100 Desert Races, a motocross event.
The other events reported their respective projected revenues as follows:
24 Hours in the Enchanted Forest – $73,000
Parnall Xtreme Arenacross – $50,000
Red Rock Team Roping Classic – $114,000
Route 66 Classic Roping – $200,000
WildThing Championship Bullriding – $200,000, although event organizer Larry Peterson qualified that his event’s revenue would depend on weather conditions and how many people showed up to the event.
Lion’s Club Downtown Celebration – $8,000
Lion’s Club Rodeo – $225,000
Walt Eddy, who runs the Best of the Best Rodeo, spoke up during the meeting and said that the city asked for events’ revenues, but what they really should’ve been asking for was the events’ net profits.
During the March 11 meeting Robinson said he’s not seeing a lot of return in investment on the events the Lodger’s Tax supports. On average, the city gives an organization about $26,000 in Lodger’s Tax funds for an event. Robinson said he sees only about a 28% return in investment on that amount.
He said he would like to see event organizers use their Lodger’s Tax money for more out of town advertising. Right now, only about one-third of the amount given to organizations for their events is spent on advertising outside of Gallup. Robinson suggested event organizers turn to social media to reach a larger audience for a lower price.
“Social media, it’s very finely tuned,” he said. “It’ll tell you exactly how many screens [an ad] got on, how many people clicked the link, how many people watch the video.”
LOOKING FOR A SOLUTION
Ultimately, the council voted to approve the eight events’ grant requests, with Piano and District 4 Councilor Ron Molina voting “no.”
Mayor Louie Bonaguidi suggested that the council hold a work session to discuss the Lodger’s Tax grant. At press time, a date for that work session had not been scheduled.
THE PRINT VERSION OF THIS STORY WHICH APPEARED IN THE MAY 23 ISSUE OF THE SUN INCORRECTLY STATED THAT LARRY PETERSON WAS THE ONE WHO TOLD THE COUNCIL THAT THEY SHOLD BE ASKING FOR THE EVENTS’ NET PROFITS, NOT THEIR REVENUES. THE STORY HAS BEEN CORRECTED TO SHOW THAT IT WAS WALT EDDY, WHO RUNS THE BEST OF THE BEST RODEO, WHO MADE THE COMMENT.
