Lake Area Business District ruled unconstitutional

Tourists heading to the Lake of the Ozarks this summer will have one less fee to pay, after the Missouri Supreme Court unanimously ruled to dissolve the lake area business district.

According to documents, the lake area business district was first formed in 1993. Since then, Camden, Miller and Morgan County have all collected up to a 3% lodging tax.

From there, funds were then turned over to an advisory board, before being put towards efforts to promote tourism near the lake. However, a pair of local businesses filed a lawsuit against the group, claiming the advisory board is a private entity, rather than a public group.

Gail Griswold, owner of Shawnee Bluff Winery in Miller County, and Laura Salamun, owner of Pointe View Management in Camden County, argued a private entity cannot control public funds. The Missouri Supreme Court agreed, ruling the practice unconstitutional last week.

“I realized that there was no representation for our business,” Griswold said. “There were many times where the private entity was running public funds without public transparency.”

As a result, lodging establishments in the area can no longer collect tax from customers. According to members of the advisory board, the former tax raised anywhere from $1.5 million to $2.3 million annually for promotional efforts.

The loss of this revenue has raised concern for some businesses at the lake. According to Mary Derringer, co-owner of Dirty Girls Crystals and Rocks, tourism accounts for about 90% of her company’s business.

She said it is helpful to have an outside organization working to drive tourists to the area.

“The year of Covid, we couldn’t have paid for the advertising we got during that time,” Derringer said.

Additionally, she said the winter season is particularly slow, with her company seeing about half the amount of business during these months. Derringer added advertising efforts designed to attract visitors during colder months are especially important.

“It’s the tourism that keeps us going,” Derringer said. “During the summer it’s just kind of a given, but during the winter we need that.”

However, Griswold argued that the lake sells itself.

“The best advertisement obviously is the lake,” Griswold said. “I can’t imagine the lake dying because we’re not collecting a lodging tax.”

Griswold added that at the time the board was created about 30 years ago, more traditional advertising and promotional efforts were used. However, groups can now utilize social media and other means to reach tourists.

“Now, with different social media platforms, the stuff that they were investing in is pretty antiquated,” Griswold said. “There’s a lot of really good mechanisms for advertising and I don’t think this lodging tax is going to hurt promotion of the lake.”

Additionally, Griswold said the fact that there isn’t a lodging tax makes traveling to the Ozarks more affordable for visitors. As such, she said the area may actually see even more tourists as a result.

“One of the best ways to advertise for tourism is to let everyone know that there is no longer a lodging tax,” Griswold said. “At a time when inflation is high and people are looking to save their dollars and travel in the most economic way, not having to pay a lodging tax is a competitive advantage.”

She also added that the Lake of the Ozarks Convention and Visitor Bureau still provides funding for promotions and advertising. Members of the advisory board stated the bureau has about $150,000 to spend on tourism each year.

Board members said they are disappointed in the court’s ruing and are looking at all legal options. Missouri allows defenders 15 days to ask for a rehearing.