The city of Wauwatosa has suspended its contract with VISIT Milwaukee and will consider creating its own commission to oversee the money it spends on promoting local tourism.
The change comes in the wake of changes in the state’s 2015-17 biennial budget that will alter the room tax law beginning in January 2017.
Currently, Wauwatosa allocates about 30 percent of room tax collected through the city’s hotels to VISIT Milwaukee. In exchange, the organization promotes tourism in Wauwatosa.
Currently, the city allocates just under $400,000 a year to VISIT Milwaukee.
The rest of the room tax collected is allocated to support city services needed when visitors arrive in the city, said Mayor Kathleen Ehley. Those services include police, fire and public works.
The Milwaukee Regional Medical Center draws about 15,000 visitors a day to Wauwatosa and Mayfair Mall and the Mayfair Collection draws another 30,000, Ehley said.
The new state legislation, which will dictate on an escalating basis that a higher percentage of the room tax goes to VISIT Milwaukee, would mean 60-70 percent of the room tax leaves the city, leaving much less money for support services, Ehley said.
“We would have to find that money in the confines of our municipal budget, or limit how we provide our support services,” Ehley said.
Ehley was quick to point out that Wauwatosa has a great relationship with VISIT Milwaukee and has been very pleased with the service the group has provided to the city, particularly in recent years.
She said Wauwatosa decided to sign a non-renewal statement with VISIT Milwaukee in October to allow the city to create a commission to oversee where tourism money is directed.
“We needed to not be affiliated with VISIT to create the commission – we think,” Ehley said. “We’re trying to figure out the best thing to do. The law is very complicated and unclear.”
Creation of the commission will need to be approved by the city’s common council Tuesday.
VISIT Milwaukee’s annual budget revenues were $8.7 million in 2014, of which 83 percent were derived from the occupancy tax and other public funding. In 2014, total city of Milwaukee occupancy taxes were $12.3 million, according to its 2014 Annual Report.
Kristin Settle, spokesperson for VISIT Milwaukee, said the organization is in the process of renegotiating a new contract with Wauwatosa.
“The original contract dates back to 1981, and a lot has changed since then – in addition to the new room tax legislation – so revisiting the contract makes sense,” Settle said. “We have a great relationship with community leaders in Wauwatosa and look forward to continuing that relationship.”