Greg Roach's Berkshires Blog
Tuesday, August 25, 2009
At tonight's City Council Meeting I was struck by the debate surrounding the raising of the Hotel/Motel Room tax from 4% to 6%. When the proposal was offered, Councilors Alcombright and Blackmer suggested that, because of the short notice of putting this tax on the agenda, it should go to the finance committee where the businesses affected by it could publicly comment. This seemed eminently reasonable to me.

The mayor and those councilors who always agree with him argued that because the tax can only be implemented at the beginning of a quarter, this delay would cause the tax to be put off until January 1, 2010 instead of beginning on October first of this year. The mayor projected that the city would lose $5000 a month in revenue if it were delayed by the committee looking into the proposal.

But what really got me, was that the mayor seemed to suggest that The Porches and Jae's Inn had already received great tax breaks in the past from the city, so hitting them with a new tax on short notice was completely justified. Also, he suggested that the fact that because no businesses had called him in the past week regarding this tax was evidence that the proprietors of these businesses did not consider the tax to be potentially detrimental to business.

While I am all for making money off of tourists, I do think that the businesses affected should at least be invited to give input. To dismiss this suggestion as somehow trivial bothers me a lot. The Porches, Holiday Inn and Jae's help pump millions of dollars into the local economy every year. They deserve a tad bit more respect.
Greg... This action, and the timing, shouldn't surprise you. That is how Barrett, and his lackeys operate. All that said I have to take the Mayors side on this one. The Town is in dire financial straits and we need every penny. Now how about Mass Moca pitching in their fair share!
Hold on, Greg. Think about the hard numbers for a second. A 2% increase means the tax on a $120 per night room goes from $4.80 to $7.20.

Of this, approximately ZERO is a burden on the hotelier. The customer pays it.

Who foregoes a night at a hotel over two and a half dollars worth of additional tax?

The fact that this tax will raise about $50-60K per year, though, seems pretty drop-in-the-buckety to me. It represents, what, 0.001% of the city budget?

If it helps pay for the maintenance on the police cars for a half a year, that's fine with me. I don't see this as a REAL tax increase at all, considering how few city residents will pay and how little it will accomplish.
Ross- It's not the tax itself that was objectionable. It was the fact that it was announced last Thursday and the mayor cited the fact that he had received no phone calls as tacit approval from the inn-keepers.

It might only be a drop in the bucket, but I believe in process, comment and deliberation, rather than "let's do this."

Also, just to play devil's advocate, the Mayor said he was delaying the meals tax increase until next year because it would be difficult for some operators to implement quickly.

Why the disparate treatment of two different sectors?
As far as I know, the mayor doesn't require approval from the businesses involved. If that were the case no tax hikes of any kind would ever pass at all; you always hear the doom-and-gloom about how many businesses will fail because taxes go up a dollar or two on something. "Tax rate's going up," he can say, and that oughta be it.

Personally, I think 2% isn't enough. As long as the prevailing theory is to keep residential real estate taxes low, we need to find the money elsewhere, right?

And what's to deliberate? What do you think every business says about any tax increase on the goods and services they provide? "It'll drive us out of business."

You know as well as I do that there's precious little reasoned debate around taxes. You really need to think we have to go through the elaborately staged ceremony of doom-and-gloom scenario presentation we'll hear from the Larkins and Fitzpatricks and the teabaggers?
Ross- It was not debate that I want, it is deliberation and the opportunity to hear any objections that are not obvious.

Blackmer brought up a couple that I had not thought about, such as group sales and pre-booked rooms. What if, and it is an "if" because no one bothered to check, the Holiday Inn or the Porches has already pre-sold a ton of rooms for the foliage fest, or the holidays? If the rooms are prepaid (group tour? Expedia?), it's the hotel that will eat the cost, not the tourist.

It could have and should have been handled better. That's all.
Eh. Maybe. But while Hotel World thrives on preBOOKING, prePAYMENT is very rare. When you book, you reserve a rate only, exclusive of local taxes and fees. Not to say it never happens, but it doesn't happen a lot. And if it was that big a problem, it could easily have come up during the phone calls the mayor says he made to the folks at the Inn and Porches....or they could have been at or sent someone to the meeting...

I just don't think there's that much to deliberate. It's simply not that complex of an issue.

By the way, I liked the liveblogging of the council meeting on Facebook. though. Hope you enjoyed the popcorn.
The increase in the hotel motel tax has savvy operators already in action, and making their case to stall its implementation during a down economic period. The only thing that worries me is that here in RipVanWinkleville people are so slow to react until way too late. Then, rather than blaming themselves for being asleep at the wheel, they will blame the Mayor and claim to be surprised at the turn of events. Here is a report on action in south county two weeks ago, and the news that Lenox and other towns are holding off implementing the tax until the economy improves.
Sorry but the auto editor keeps cutting off the long url to the WAMC story.
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