Hotels ask Senate to reject Lucas Co. tax for new arena

12/14/2006

COLUMBUS The hotel industry yesterday urged Ohio senators not to place the burden of funding construction of a downtown Toledo arena and expanded convention center on the backs of one industry.

I love the idea of an arena, said Patrick Czarny, general manager of the Maumee Bay State Park Resort. I m a sports fan. It s a great-sounding thing. But why does it have to be financed by just one industry? Why is it always the hotel industry that they come back to?

He noted that parking lots, restaurants, and other businesses would benefit from a downtown arena. Why are they not asked to support this? he asked. It should be an expense shared by everyone.

The Senate Finance Committee is considering a $1.8 billion capital budget bill that is on the fast-track to Gov. Bob Taft s desk during the lame-duck session ending next week. The bill overwhelmingly passed the House Tuesday with no debate on the Lucas County hotel tax issue.

Lucas County has a hotel and lodging tax of 8 percent on top of state and local sales taxes of 6.75 percent. The bill would open a one-year window beginning Jan. 15 for the county commissioners to raise the hotel tax to 10 percent, for total taxes on room rates of 16.75 percent.

That would give the Toledo area one of the highest bed taxes in the nation and would hand Monclova Township, with its own 3 percent tax on two hotels, the distinction of having the highest taxes in the nation at 19.75 percent, according to industry figures.

Under the bill, the county commissioners could put the issue first to voters or raise the tax on their own with the knowledge that a citizen-driven petition could seek to repeal it on the November, 2007, ballot.

Sen. Randy Gardner (R., Bowling Green), who represents western Lucas County, noted that the hotel tax proposal is supported by the Toledo Area Chamber of Commerce and nearly all local officials.

But while he said there is some urgency in getting the long-talked-about arena project off the ground, he added there s at least one way to pay for it that does not require legislative approval.

It s my understanding that a quarter-percent sales tax over two years generates about the same amount of money as this does over the [30-year] life of this proposal, Mr. Gardner said.

Supporters of the hotel tax concept have argued that it would be an easier sell to county residents than a general sales tax since most would never pay it.

Chad Bortle, vice president of operations for SJB Management Inc., owner of the AmeriHost Inn in Monclova, noted that having bed taxes higher than in Wood County s Perrysburg just two miles away or Monroe County encourages bus tour operators and Internet comparison shoppers to book elsewhere.

Mr. Czarny said current tax rates just cost the resort a major holiday season booking. The Rumi Foundation, a Muslim charity, canceled its winter retreat reservations for about 100 rooms over five nights to take advantage of lower rates at the Deer Creek Resort at Mount Sterling south of Columbus. The group had stayed at Maumee the last two years.

He said hotels can t continue to cut their own rates to compensate for increased taxes. The resort lost money last year. We re barely surviving as it is, he said.

Contact Jim Provance at: jprovance@theblade.com or 614-221-0496.