For The Tennessean
The Hermitage is asking the state and Davidson County if it can keep its sales tax on admission and goods sold at the Andrew Jackson estate to help pay for expansion of the museum.
If approved the change could net the nonprofit roughly $60,000 a year. A bill sponsored by Sen. Joe Haynes is in the Senate Finance Committee after passing the Senate Finance Subcommittee.
However, the co-sponsor of the bill, Old Hickory Rep. Mike Turner, says he is temporarily tabling the bill in the House because Metro has told him the precedent of the state giving back city funds is risky.
Turner said he expects to talk with Metro officials about tweaking the bill to make it more attractive.
“The question we raise is that the General Assembly shouldn’t give away the local sales tax,” said Metro Finance Director David Manning.
“Two-thirds of the local sales tax goes to schools, and that’s already programmed into the budget, and, while this may be small from an overall standpoint, it does set a precedent because there are many other worthy organizations.”
A 7% sales tax goes to the state and a 2.25% sales tax goes to the city.
The bill has passed in the Senate Finance Subcommittee and is being considered in the Senate Finance Committee.
“When I made the motion, and it got a second and discussed and it passed out without dissenting vote, I was a little bit in a state of shock,” Haynes said.
The Hermitage Executive Director Patricia Leach said people tend to think of The Hermitage as an institution funded by local and federal monies.
“A lot of folks think we get regular federal and state support, but we do not,” Leach said.
“We are a pure nonprofit. Ninety-five percent of what we need to operate comes from our gate admission. With the price of gas going up, if admission goes down, it really hurts us.”
Leach said the Ladies Hermitage Association, which operates The Hermitage, has lobbied the state for funds but has been unsuccessful because, she said, “there just isn’t the money.”
Turner said the city’s objections to the sales tax bill make little sense because the development of a national site could net much more money in terms of tourism than the city would forfeit in taxes.
“It would be a mega tourist attraction out there, and they would be spending dollars here for gas and food and other things, and you are not really talking about that much money out of Metro’s pocket,” Turner said.
He said he believes the state would relinquish its sales tax.
According to Manning, the city would consider giving The Hermitage more money, but leaving the city out of the process was not the way to do it. He said the state has already limited funds for schools dramatically.
“It’s only the two and a quarter (sales tax) that we raise issue about,” Manning said. “The state is free to relinquish whatever it chooses to relinquish. … If they need a grant, the best way to do that is to apply to Metro Council for a grant.”
The estate, Leach said, needs more money to fix structural problems such as a “leaking” visitors’ center and to expand educational and other programs.
“It’s not going to be that much money, but when you look at it over 10 or 15 years, it’s significant,” Leach said.
“Our visitors’ center was built in 1989, and we have outgrown it. We currently have a three-year waiting list of schools wanting to participate in our Hands on History Program. We just don’t have the space or the staff.”
The ultimate vision for the estate, Leach said, was to make The Hermitage a state-of-the-art educational facility.
“We want to expand the visitors’ center into a major exhibition hall and research center, and this retail sales tax would assist us in trying to help fund that,” Leach said.
The nonprofit recently got a $50,000 National Endowment for the Humanities planning grant to map out a “new interpretative master plan ” for the whole Hermitage property, she said. And a $250,000 NEH grant will put the plan into implementation.
“But it doesn’t get us the expansion. It gets us a new orientation,” Leach said.
If the added funds come through, she said, The Hermitage will launch a capital campaign by 2006.
Leach said the exhibition hall would be “high-tech and interactive.”
“Here we are a presidential site right in Nashville, and when you look at other presidential sites and the kinds of programming they are doing, this is the direction they are heading,” Leach said.
Leach said more money could help develop programs that would convey more than just the story of President Andrew Jackson’s life.
“There are many, many more stories to tell out here, including Indian removal, slavery, the cotton economy and westward expansion,” Leach said.
Haynes said the initiative is a way for The Hermitage to garner funds in light of the city and the state budget constraints
“This really is trying to be innovative because they don’t get any state funds,” Haynes said. “It’s a way to continue a historic facility that means so much to not only Tennessee but especially to Davidson County.”
Belle Meade Plantation Executive Director Norman Burns said all cultural nonprofits are struggling for dollars and should be included in the legislation. Burns is chairman of the Public Policy Committee of the Association of Nonprofit Executives.
“It would be better for all of the historical types of attractions in Nashville to be a part of this,” Burns said. “It would be good for all the art museums and the botanical gardens.
“If we are going to do this then it should be everyone. … The services that we provide to Middle Tennessee is enormous, and we do it with fewer dollars than anybody would in the public sector.”
Burns said the ANE committee will discuss the bill at its next meeting.
“Nonprofits are always struggling to earn additional revenues through traditional and nontraditional means,” he said. “More and more in the Nashville and the Middle Tennessee area, we are all competing for the same development dollars.
“For the state of Tennessee to step and recognize their responsibility as trustees of our heritage and be willing to return some of that back to nonprofits would free up nonprofits to hire the employees and do the type of programs that the community needs.”
Sales taxes are used to help pay costs at some venues.
The Titans keep the state’s portion of the sales tax, Manning said, to pay back the bonds used to build the Coliseum. Earlier state legislation drafted by Memphis legislators to bring in an NFL franchised opened the door for that initiative.
Manning said rebating of sales tax for sports facilities has been done statewide. The law had to be amended, so it can apply to existing franchises as part of a plan to build a new stadium for the Nashville Sounds.
“The one that they passed for the Sounds, they put in a revision that I requested,” Manning said. “But that is something that we were consulted on. … It is a process issue because the local government decides whether to build sports facilities.”