Hotels object to tax increase

May 20, 2008 10:36 am

— By TESA CULLI
tesa.culli@register-news.com
MT. VERNON — A contingent of hotel and motel owners and operators in the King City voiced their objections to raising the $1 per room surcharge tax to $2 during Monday’s City Council meeting.
“This is the third tax on our industry in five years,” John McHugh of Hampton Inn said. “...This is not equitable to our business. I don’t understand how you can come back to the same well and hit our business over and over.”
The council held a second reading and approved the increase to the hotel/motel “bed tax” surcharge with the increase going into the general corporate fund. The increase will add about $210,000 annually to the general corporate budget, which has a $600,000 deficit due to subsidies in services which were ongoing for several years.
City Councilman David Wood countered claims by the businesspeople that the increase in the surcharge would affect the number of rooms and occupancy.
“I’m not convinced it will have the negative impact you suggest,” Wood said. “And this is not the only revenue source we’re looking at. ... Looking at the room rates in other communities, the numbers and rates are not as large as suggested.”
Keith Baldwin of the Holiday Inn said the council should be spending more money on tourism.
“If you don’t take the majority of the money in tourism, our industry dries up,” Baldwin said. “Don’t increase the tax, help us increase occupancy. That’s a win-win situation for everyone.”
Richard Beatty of Fairfield Inn said he believes the increase in the tax will make Mt. Vernon motels less competitive than Effingham and Marion, and the city will lose on the business traveler.
Beatty also expressed concerns that the additional funds would be used to add to infrastructure at the new overpass interchange. Any hotels and motels that might locate to the area now under construction would be in direct competition with the existing hotels at the existing interchange on Route 15.
Wood and Mayor Mary Jane Chesley explained the funds from the surcharge are needed now to upgrade existing infrastructure needs.
— Approved a bid of $351,491 from Jax Asphalt for motor fuel and general corporate street maintenance supplies;
— Approved the vacation of an alley and the change of zoning for property at 1117 S. 15th St. from B2 to RM2;
— Authorized the sale of municipal property including two Toro 322-D lawn mowers; a 1991 Dodge Ram van; a 1991 International tandem dump truck; a 1997 Ford F150 pickup truck; an 8-foot-by-12-foot trailer; a 1982 Ford pumper truck; a 1992 Plymouth Grand Voyager minivan; a 1987 Ford Econoline van; and a 1971 American Lefrance pumper;
— Authorized notice of dangerous and dilapidated housing at 2102 College St., 312 S. Fifth St., 230 Casey Ave., 226 Casey Ave., 1111 S. 24th St. and 617 1/2 S. 19th St.;
— Approved a revolving loan agreement with EJL Enterprises doing business as State Beauty Supply;
— Proclaimed this week Emergency Medical Services Week; and
— Reappointed Curt Mowrer and Bill Pittman to the Police Pension Board.