Hamilton County proposes hotel‑motel reallocations, $500,000 for sports and events group; mayor urges split with Chattanooga

Hamilton County staff outlined a proposed reallocation of hotel‑motel tax revenue during a finance committee budget hearing, recommending reimbursements to the debt service fund tied to a 2024 bond and new allocations for downtown development, tourism marketing and recreation projects.

County staff said the proposed hotel‑motel revenue distribution includes: an estimated $336,000 for debt service reimbursement tied to a roughly $5,000,000 set‑aside from a 2024 bond for recreation projects; $709,700 for recreation capital projects that otherwise would have been funded from the general fund; $700,000 for downtown development; a proposed $500,000 allocation to a newly proposed sports and events corporation; and several other line items for tourism and event support.

Mayor and commissioners debated broader questions about how the county and the City of Chattanooga should share tourism marketing costs. The mayor told the committee the current long‑standing arrangement under which the county provides most hotel‑motel revenue to local tourism work “does not make sense anymore” and said the county should press for a split so the city shares a larger portion of the cost. The mayor described the proposed budget as a “transparent, slower, more diplomatic approach” toward shifting responsibility and said the city’s contribution has increased in recent years but remained a small share of the total.

Representatives of local tourism urged continued investment in marketing. One tourism representative argued that reducing promotional dollars would slow economic growth and cited new hotel construction in the market, saying the county must advertise to maintain occupancy and average daily rates. He warned: “If we don't, that'll erode revenue,” and pressed for coordinated marketing across the region and better countywide coordination among municipalities that collect occupancy tax.

The finance committee also considered a proposed $500,000 allocation to a new sports and events organization led by Tim Morgan, described in the hearing as intended to add capacity for the county in recruiting and producing sports tournaments and guiding investments in youth sports facilities. The mayor said the allocation was meant to be additive to the work of Chattanooga Tourism Company, and to give Morgan time to organize a board, develop relationships with county departments and guide larger future investments. Commissioners asked for a business plan before supporting a larger appropriation; one commissioner told the committee she had not previously heard of the sports and events corporation and requested the organization’s plan before the commission votes on the budget.

Commissioners also questioned whether hotel‑motel funds should be used for smaller, community projects such as turf fields, with some urging a focus on larger, regional assets that directly attract out‑of‑area visitors. Several speakers recommended convening all municipalities that collect occupancy tax — not just the city and county — to agree on countywide priorities.