The Buncombe County Tourism Development Authority approved its annual budget Wednesday, outlining how it plans to spend an estimated $34.5 million dollars in tourism tax revenue during the upcoming fiscal year.
The budget’s passage comes days after Gov. Josh Stein signed a law that puts new limits on the use of such funds, which are paid by visitors in the form of occupancy taxes every time they stay at commercial lodging such as a hotel or vacation rental.
By law, Buncombe TDA is required to spend two-thirds of the county’s occupancy tax revenue on tourism promotion and administrative expenses. The remaining one-third must be spent on community capital projects.
Since the TDA is anticipating $34.5 million in total occupancy tax revenue for the 2027 fiscal year, the budget passed Wednesday puts two-thirds of that amount, or $23 million, toward its operating budget, which includes tourism promotion and administrative expenses.
The TDA is using $4.1 million from its existing fund balance to help fund this year’s operating budget, bringing the total to $27.1 million.
The remaining one-third of total occupancy tax dollars, or about $11.5 million, will go toward community capital projects. The money will be divided equally between two funds: the Tourism Product Development Fund (TPDF) and the Legacy Investment from Tourism (LIFT) fund.
The funds are open for applications for projects in alternating years. With the inclusion of money that was previously allocated to the program, about $12 million in funding is available for the latest round of LIFT projects, which will be decided in September.
A presentation on the total 2027 fiscal year budget breakdown can be viewed here.
New law governs tourism tax spending
The law recently signed by Stein, Senate Bill 484, bars local governments from spending occupancy tax dollars on traditional government services like public safety and education.
As recently as 2024, community members in Asheville and Buncombe County were urging the TDA to use some of that money for affordable housing. But Vic Isley, president and CEO of the Buncombe County TDA, said that’s currently not an option.
“I think Senate Bill 484 makes it very clear that you can’t use occupancy tax in the state of North Carolina for that purpose,” Isley told BPR in an interview after Wednesday’s TDA meeting.
Isley didn’t weigh in on whether the law should be changed. She noted that over the past 25 years, the TDA has invested nearly $110 million in tourism-related projects benefiting both locals and visitors.
“It’s a very broad use, from greenways and parks to baseball fields and soccer fields that families here use, as well as attracting events from outside the county,” Isley said.
When the state House voted on the legislation earlier this month, two Buncombe Democrats — state Reps. Lindsey Prather and Brian Turner — voted “no,” while state Rep. Eric Ager voted in favor.
In last week’s Senate vote, Sen. Julie Mayfield, a Democrat who represents south and central Buncombe County, was the lone “no” vote.
In an email to BPR, Mayfield said she voted against the measure because she believes lawmakers should allow the expanded use of occupancy taxes rather than further limiting them.
“Communities have different needs related to tourism, as evidenced by the variety in local bills authorizing occupancy taxes, and those communities should have more flexibility to use the dollars where they are most needed to support tourism — such as public safety, beach renourishment, affordable housing — than this bill allows,” Mayfield said. “In Asheville, for instance, it would be helpful if some of our millions of occupancy tax dollars could be used to help build affordable housing for hospitality workers or otherwise help reduce their cost of living so they could actually live in the community in which they work.”
Lawmakers introduced Senate Bill 484 in response to a state Supreme Court decision last month allowing coastal Currituck County to use its occupancy tax dollars on things like law enforcement, fire and emergency response.
In a twist, the General Assembly passed a separate measure last week that would grant Currituck an exemption from the sweeping state legislation, allowing the county to spend occupancy tax dollars on public safety and other services — “the very issue that prompted the legislation to prohibit it,” Mayfield noted.
“So you might say, ‘Well, it's easy to get an exception so what's the big deal?’’” Mayfield said. “My answer is that these bills are coming now in response to the bigger bill prohibiting certain uses. I think we will see fewer of these going forward.”
