I grew up in a (tourism) town that did this. They had moderate property taxes (moderate property taxes on many multi-million dollar properties = huge windfall). The town squanders it all. The cops have every toy they want, the classrooms are full of overpriced hardware. I guess that's nice. The results delivered by the schools and cops are nothing special (relative to the rest of the state) though.

I shit you not (believe me, I wish I were), the town is looking into running it's own pet cemetery. If that isn't boondoggle waste I don't know what is.

Locals still pay high vehicle excise taxes, town dump fees are sky high (the rust belt city I now live in takes my trash away every week for less $$), there's a big fee for a (local resident) beach parking lot pass, etc, etc so it's not like the town is using it's windfall to ease the burden on everyone else.

I think expecting a suddenly cash flush government to fairly distribute it is a recipe for disappointment. I would be very wary of the "profit centers" (e.g. hospitality industry) achieving something akin to regulatory capture whereby they get whatever they want because they're the money makers for the town.

I'd love for municipalities to be able to make money hand over fist using tourism and then use that money to provide for their citizens (like Norway does with oil money) but I have near zero confidence that can happen without being corrupted by special interests and the well connected.