County Manager Dan Palmer floated the idea at a recent Finance Committee meeting. He says the additional revenue could be used to offset the cost of tourist-related services like the fish hatchery and off-season marketing.
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The occupancy tax, or bed tax, is a tax on hotel and lodging stays.
The current three percent bed tax generates about $1.5 million annually. Of that, 95 percent that goes to the Lake Placid-based Regional Office of Sustainable Tourism, or ROOST, to fund tourism marketing efforts across the county.
Essex County lawmakers, like Wilmington Supervisor Randy Preston, say increasing the tax to five percent would generate an additional $1 million to $1.2 million in revenue.
"Franklin and Clinton County are both pursuing a five percent occupancy tax," Preston said. "I know that there is going to be some businesses that may not think this is a good idea. I really think at this point in time that we need to do that. However, I would certainly like to see this [go] into a dedicated fund and not the general fund."
Preston says the increased revenue would be split up four ways. For one, he’d like to see it used to fund the county’s fish hatchery.
The Crown Point-based facility has been threatened with closure several times in recent years due to ongoing budget shortfalls. It costs taxpayers about $290,000 per year.
"We seem to go round and round and round, year after year, about the fish hatchery," Preston said. "The fish hatchery actually needs some improvements there that could possibly benefit by the sale of fish. Because of the budget constraints we’ve been under, we’ve never been able to accomplish that. I personally think that fish hatchery is a great asset to the county. It generates tourism, and this is a way to pay for it."
Preston says the rest of the additional revenue would be used to fund a county bus service for tourists as well as off-season marketing. The remaining funds would go to tourism-related projects in Essex County.
A resolution to increase the bed tax cruised through two committees and will go to the full board for discussion Tuesday. But one of the board’s most influential supervisors says he’s not sold on the idea.
North Elba’s Roby Politi represents the largest town in the county and holds the weightiest vote on the county board. He says he won’t support an increased bed tax until he sees more specifics about the plan.
"In many ways, once again, Lake Placid [is] providing the financial wherewithal to offset a problem," he said. "I can’t tell you that I’m all that excited about it."
North Elba and the Lake Placid community generate the lion’s share of occupancy tax revenue in Essex County.
"If you’re going to have to tax, it’s always better to tax people that don’t live here," Politi said. "It all depends on what the proposed use is for that money. If the proposed use of the money is to strengthen our tourism program, which ultimately helps our hotel and motel owners, which produce some 85 percent of that money from right here, that’s one thing. I’m totally against it if there’s any thought whatsoever of it going into the general fund."
Randy Preston insisted last week that the increased revenue wouldn’t go to the general fund.
The county will also have to convince hotel owners that the increase is a good idea. Some, like Dan Brownell of SaranacLake, are all for it.
Brownell’s family owns Gauthier’s Saranac Lake Inn.
"It’s more money for the area for marketing," he added. "[ROOST] have shown that every dollar they spend on marketing, it comes back 50 or 60 times. More dollars that way would be great for the area, even if they do supplement the fish hatchery or a couple of the other tourism-type programs."
Art Lussi, whose family owns the Crowne Plaza Resort and Golf Club in Lake Placid, says the increase would be a huge mistake.
"To tax people who are supporting our community, our Park, our existence - at a time when we’re in recession - I think is one of the craziest ideas I’ve ever heard in my life," Lussi said.
Lussi says the county should instead look at imposing a tax on second home owners who rent their properties out to visitors.
Essex County has some work to do before it can increase the bed tax. The state Legislature has to grant the county home-rule authority, which could prove tricky.
Recent requests to increase the sales tax to eight percent have been blocked by state lawmakers who are nervous about tax hikes.