Some legislators wary of hotel tax increase

Some Howard County state legislators are skeptical of an Ulman administration proposal to raise the local hotel/motel tax, presented as an idea to increase tourism and economic development, because the draft legislation presented at a public hearing doesn't say where the new revenue would go.

Sen. James N. Robey, a Democrat, said he was concerned that the money wouldn't be set aside by law

"I thought it would be in the bill. Why isn't that in the bill?" he asked David B. Nitkin, County Executive Ken Ulman's new lobbyist, at the hearing Monday night in the George Howard building in Ellicott City.

Nitkin, a former Baltimore Sun editor who recently became director of policy and legislative affairs for the county, replied that administration officials "prefer not to do that, but we're open to that discussion." He said budget director Raymond S. Wacks and others "prefer not to have their hands tied," in case unforeseen fiscal circumstances develop. Nitkin added that the county has a good track record over several administrations, including Robey's time as executive, of doing what it has promised. That didn't satisfy Robey, however.

"I want to make sure if we commit to increasing the hotel/motel tax, it goes to tourism," he said.

Having witnessed recession-driven shifts of state funds from so-called dedicated uses like the state's Transportation Trust Fund and Program Open Space to plug budget holes, Robey and other local legislators appeared wary of approving a tax increase without written guarantees the money would be used as promised. As a measure that would only affect Howard County, such a tax increase must be approved by the Maryland General Assembly, starting with Howard's 11-member delegation.

At the same time, administration officials still weathering the worst of the revenue downturns caused by the recession don't want to box themselves in if a new emergency occurs.

Ulman has said he merely forwarded the request to increase Howard's hotel tax from 5 percent to 7 percent — which would match Anne Arundel County's — from local tourism and economic development officials who believe the extra revenue would help them recruit more corporate business in the county. The expected $1.2 million in new annual revenue would be split between the Tourism Council, the Economic Development Authority and the general county treasury.

Rachelina Bonnacci, executive director of the small county tourism agency, and several hotel officials testified that the revenue, if applied to increasing business, could have a big impact on Howard's growing hospitality industry. The roughly $400,000 to tourism would nearly double the agency's annual budget, enabling her to create a specialized sales team, she said, to aggressively seek out new travel business.

"The natural next step is to grow a sales team," she told the legislators. Richard W. Story, CEO of the county's Economic Development Authority, said his agency's share would "create a new marketing division specifically targeted at [corporate] headquarters." He said Merkle Inc., a corporate marketing firm that moved to Columbia over two years ago, has generated over 4,000 room nights at local hotels, not to mention restaurants and other spending.

Officials from hotel chains Marriott, Sheraton and the new Springhill Suites Hotel at Snowden River Parkway and Broken Land Parkway all said they support the 2 percentage-point tax increase and believe it would generate more business.

"We need more [corporate] headquarters. It makes good business sense for Springhill Suites," said Johnetta Jordan, the hotel's general manager. Leslie Portella, account executive for Marriott International, said Howard's hotels had a 63 percent occupancy rate through Nov. 10, and said business revenue is down 1.7 percent over the previous year. "Competition is fierce," she said."

Beth Brekke, senior sales manager at the Columbia Sheraton, said the hotel underwent a $13.5 million renovation. The new revenue, she said "is an investment in all of our futures."

The League of Women Voters supported the bill without any specifications for how the money would be used. Still, other legislators also expressed doubts, as did Julian Levy, a Columbia resident who said he's a frequent business traveler.

"They're ripping off the business traveler," Levy said. When he's quoted a room price of $150 and gets a bill at checkout for $185 due to taxes and fees, he said, "It clicks very firmly in my head," and he will avoid that place on his next trip. He suggested a one-percentage-point tax increase split in half between tourism and economic development, leaving the county treasury out. He also suggested imposing a "sunset" provision that would automatically end the tax hike at a set time.

The county's three Republicans, who oppose increasing taxes, all expressed doubts similar to Robey's, with state Sen. Allan H. Kittleman asking why the county general treasury should get any new revenue. "All we're hearing is a need to help economic development and tourism. Why isn't it all going there?"

Among other bills, Del. Warren E. Miller, a Republican, urged approval for bills allowing up to five slot machines in members-only veterans clubs suffering declining attendance as Vietnam veterans age. But Robey pointed out that no member of the Ellicott City VFW post appeared to speak for the measure. Miller also is sponsoring a bill allowing liquor tasting at package-goods stores, to match a law Baltimore County enacted last year. Store owners want this, testified Eric Kaufman, who owns a U.S. 40 liquor store, but Sen. Edward J. Kasemeyer questioned the effect of drinking up to four ounces of hard liquor at a tasting compared to lower alcohol levels in wine or beer tastings, which are already allowed.

All the other measures seek a combined total of about $1.7 million in state bond money for local projects, including the ongoing Blandair Park in Columbia; the proposed Troy Hill Park in Elkridge; renovation of a group home owned by the ARC of Howard County; renovation of a farmhouse at the Howard County Conservancy's Mt. Pleasant Farm; and renovation of the old post office building on main Street in Ellicott City for the tourism office's expansion. Availability of state funds given the state's $1.6 billion projected shortfall is uncertain, however, Kasemeryer said.

Levy testified against that too. "Is this the right time to take on additional indebtedness?" he asked. The state money comes from sale of bonds and must be matched by groups receiving the aid.

The delegation will discuss and vote on all the bills during delegation meetings in Annapolis starting later this month.

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