Increasing bed tax would be a mistake
In an attempt to find money to balance the budget, Essex County officials are exploring all areas of generating revenue and saving expenses, as they should. But with regard to renewed conversations about increasing the occupancy tax, the Board of Supervisors should move on to something else.
The occupancy tax – also known as the “bed tax” – is charged to visitors staying in rooms in Essex County inns, B&Bs, motels and hotels. It is currently 3 percent and should stay there.
Essex County Board of Supervisors Chairman and town of Jay Supervisor Randy Douglas says an increase in the occupancy tax could help offset property taxes by using the revenue for “infrastructure and repairs,” possibly to improve the county fish hatchery at Crown Point.
We encourage supervisors to tread lightly when it comes to wish lists. Using the occupancy tax for anything other than tourism defeats the purpose of charging tourists a fee to stay in Essex County. As North Elba Supervisor Roby Politi has said, that money should only be used for tourism-related items. It’s not that the fish hatchery isn’t related to tourism; it’s just that wish lists for “infrastructure and repairs” could easily get out of hand and lead to non-tourism-related improvements.
We’ve been here before. In 2012, the county supervisors planned to raise the occupancy tax to 5 percent, but that effort failed. The 2012 plan would have split the funds four ways: 25 percent for the fish hatchery, 25 percent to a tourism product development fund, 4 percent for visitor transportation and 46 percent for offseason marketing programs. An increase to 5 percent was estimated to generate an additional $1.2 million in revenue.
At a time when Gov. Andrew Cuomo is trying to lower taxes statewide – or at least change the impression that New York overtaxes its residents and businesses – this is not the time to overtax our guests. Furthermore, we’re not certain any time is good to overtax our guests, residents or businesses.
The latest conversation about increasing the occupancy tax came after the 2013 numbers came in. Revenue is up, so county officials have dollar signs in their eyes.
In 2013, the town of North Elba, which includes Lake Placid, Ray Brook and part of Saranac Lake, set a record for the highest amount of occupancy tax collected in one year in Essex County with a total of $1,696,201, an increase of $115,128 from the year before.
The occupancy tax was originally set up in 2000 to give 95 percent of the funds raised to the Regional Office of Sustainable Tourism for destination marketing efforts and the remaining 5 percent to the county for administration. The total occupancy tax collected from 2001 to 2013 for all of Essex County was $20,463,726.
The amount collected from North Elba during that 13-year period is $18,169,118, or 88 percent of the total from all 18 Essex County towns. The other top-earning towns include Ticonderoga with $55,593 in 2013 and a total of $557,959 since 2001; Wilmington with $54,755 in 2013 and $596,277 since 2001; and Keene with $47,812 in 2013 and $424,212 since 2001.
Looking at this kind of money, it’s no wonder county officials are exploring the occupancy tax as a revenue generator again.
But supervisors should put themselves in the shoes of the hard-working people spending vacations in Essex County before deciding whether they want to pursue an occupancy tax increase. An extra 2 percent tax may not be much for some people, but it is for others. And at what point do we stop draining the bank accounts of our guests before they begin to vacation elsewhere?
At some point we, the people of Essex County, have to pay for the services we require rather than having our guests chip in more for them. Essex County has steadily, over the years, kept its property taxes lower than those in neighboring Franklin and Clinton counties. No politician likes to be the one to raise taxes, but often the alternative they seek is to pass the costs on to someone else who isn’t around to vote: the next generation, perhaps, or the visitor.
Here in the Adirondack Park, we’re in the hospitality industry, and we do it quite well. Let’s not screw it up. There’s nothing less hospitable than overcharging your guests, just because you can.