Harford County might not be a top tourism destination, but plenty of people travel there to work at Aberdeen Proving Ground or for sporting events such as the Cal Ripken World Series and youth lacrosse and soccer tournaments.
Now Harford is considering a bill to join every other Maryland county in capitalizing on those overnight stays by levying a hotel room tax. The Harford County Council will hold a hearing Tuesday in Bel Air on the proposed 6 percent occupancy tax.
"We are at the time we need to move ahead with it," said Harford County Executive Barry Glassman, who requested the bill's introduction last month.
The tax would apply to stays of up to 30 consecutive days at most types of lodging with four or more rooms. It would be paid on top of the state's 6 percent sales tax.
All Maryland counties, with the exception of Harford, levy such occupancy taxes. Rates range from 3 percent in Frederick and Cecil counties to 9.5 percent in Baltimore City, which collected $28.5 million in fiscal year 2014, according to the Maryland Association of Counties.
Glassman, who worked on the tax-enabling legislation as state senator from Harford before being elected county executive, said the county needs to capitalize on the influx of visitors drawn by Aberdeen Proving Ground as well as minor league games, other sporting events at Ripken Stadium and youth tournaments.
County officials estimate the tax will raise $2.75 million a year that would be spent on tourism-related activities. The money would be doled out through a competitive grant process that would be open to nonprofit groups, businesses and municipalities with plans to promote and support areas such as sports, festivals, museums, agriculture and farm-to-table experiences.
Revenue generated in Harford's two incorporated towns with hotels, Aberdeen and Havre de Grace, would be split evenly with those jurisdictions. Aberdeen has more than 1,200 rooms, while Havre de Grace is home to most of the county's museums. Bel Air, though incorporated, does not have lodging subject to the proposed tax.
The county's business and tourism community has long supported levying a room tax.
"It really will be something that will help the county," said Pam Klahr, president and CEO of the Harford County Chamber of Commerce, which wants to hear details of the proposal before taking a formal position.
Additional revenue for tourism could help the county promote its attractions, waterfront, restaurants and other businesses to the families that come for sports events and are looking for other activities, Klahr said.
"In many cases, they go outside the county," she said.
Glassman argues the tax would level the playing field for county residents who pay room taxes elsewhere in the state and nation but miss out on the benefits on their home turf.
"We're the only Maryland jurisdiction without it, and probably one of the only ones on the I-95 corridor on the East Coast without a room tax," Glassman said.
Most Maryland counties dedicate occupancy tax revenue for tourism-related expenses, such as convention centers, tourism offices, convention center debt service and municipalities where hotels are located, according to the Maryland Association of Counties.
"These hotel taxes are relatively common throughout the country … but whether they work or not, the literature is not clear, but theory suggests it's not as great as proponents think," said Eileen Norcross, a senior research fellow at the Mercatus Center at George Mason University.
Often the revenue is earmarked for convention centers and stadium expenses, she said.
Besides hotel guests, hotel operators also often bear the burden of the taxes, Norcross said. Sometimes, plans for increased tourism never pan out, and in weak markets, operators trying to stay competitive may be unable to raise prices to cover the room tax, she said.
Some hotel owners in Harford say they support adding a room tax if it would help promote tourism and in turn boost business, but they disagree with the proposed 6 percent rate and want to ensure transparency in the grant approval process.
"Six percent is a huge burden, especially to the smaller hotels," said Uyesh Bhatti, owner of two Aberdeen hotels, the Travelodge and Budget Inn.
He and other hotel owners also would like to see the county offer a rebate to hotel owners who pay the collected hotel tax on time, a system he said has worked in Cecil County.
"Let's do this bill properly, and everyone will benefit," Bhatti said
A 2013 study of lodging taxes by hospitality consultant HVS found that hotels typically get on board.
"Hotel owners are often willing to cooperate with local governments to impose lodging taxes dedicated to tourism promotion and convention center construction," the study said. "For hotel owners, tourist-oriented public facilities and advertising serve as clear drivers of room demand. All of the hotels in a given market can benefit from programs which bring tourists and convention-goers to a city."
Under Harford's proposal, the county's portion of funds likely would be distributed by a committee of a county economic development advisory board, though details need to be finalized.
Aberdeen City Manager Doug Miller said revenue from the tax would allow the city to complete much-needed maintenance projects on the 12-year-old Ripken Stadium, the county's top tourism destination, such as replacing the roof and heating and ventilation system and railings. It also would allow the city to lower its property tax rate by 2 cents, an amount that's now dedicated to stadium upkeep.
Glassman said he envisions revenue helping the county develop tourism with a focus on sports and agriculture, including farmers' markets and farm tours.
"We're trying to develop a program so when folks coming through I-95 … stop, we capture that [business] at hotels, but they spend the next day at restaurants and visiting Ripken Stadium and other locations."