January 11, 2013

Bed-tax idea draws fire

Franklin County lawmakers get an earful from hotel, motel owners


---- — TUPPER LAKE — Lodging owners bashed legislators for not consulting or including them in their plans when considering a bed tax in Franklin County.

Two public hearings Thursday attracted fewer than 20 people to talk about the county’s plan to charge a 5 percent fee on overnight guests.

But those who were present were vocal in their opposition to the idea which the State Legislature and governor must approve before the county can tack on the fee from all owners of vacation-rental properties, bed-and-breakfasts, cottages, condominiums, hotels and motels.

A third hearing is set for 5:30 p.m. Thursday, Jan. 17, in the fourth-floor legislative chambers in the County Courthouse in Malone.

About 15 people turned out at the Tupper Lake Village Office to express their frustrations.

“Do you want me to go to your business and tell you how to run your business?” said Jay Chojnowski, owner of the Red Top Inn.

He said he called other hotel and motel owners when the bed-tax idea first came up and said only the Holiday Inn Express in Malone was in favor of the new charge on customers.

When told the money would be used to promote tourism countywide, Chojnowski said, “Saranac Lake is already getting money from two counties. You’re stabbing us in the back.”

Robin Doolen, who owns Shaheen’s Motel with her husband, Terry, said Tupper Lake lodgers get little benefit from the existing tourism efforts in the county and now they are being “asked to ask for additional revenue with no benefit.”

She and Margaret Ernenwein, owner of the Park Motel, said they would rather see bed-tax money come back to the communities that generate it so they can decide how to spend it.

Ernenwein said increasing a customer’s bill from 8 percent sales-tax rate to 13 percent with the bed tax added in “is too big a jump. It’s going to stop me from raising my rates,” which she hasn’t done for two years.

When bed tax was first raised by an alliance of chambers of commerce from Tupper Lake, Saranac Lake and Malone, she said she was involved because the towns were supposed to get the money, not the County Tourism Office.

“Franklin County Tourism doesn’t do a thing,” Ernenwein said.

Legislator Paul Maroun (R-Tupper Lake), who is also the village mayor, said he thought the local chamber was working with the lodging owners and keeping them informed about the progress of bed-tax legislation, but the owners told him that was not the case.

So he offered to meet with them and hear their concerns before voting on a proposed local law.

“If my hotel and motel owners don’t want it, I won’t vote for it,” he said, adding that owners should consider that increased revenue mean taxpayers won’t be paying for the Tourism Office any longer and higher sales-tax revenue would be generated.

In Saranac Lake, only two people turned out for the public hearing in the Harrietstown Town Hall.

Curt Reynolds was concerned he would be asked to charge a bed tax to people who rent his home in the summer, income he uses to help pay the taxes on his waterfront home which he says is assessed at close to $1 million.

But he was told since it is his primary home and not a second home or seasonal one, he would be exempt from the law. He was told a provision clarifying that distinction will be added to the final version of the local law.

Sewa Arora, owner of the Hotel Saranac, said he gets customers to stay in his 86-room establishment because there is no bed tax.

“We have gone though recession so adding 5 percent to guests will discourage people from coming to Franklin County,” he said.

Saranac Lake Democrat Timothy Burpoe disagreed, saying it does not create an economic disadvantage.

“People aren’t going to be looking at that when they go to stay at the Hotel Saranac,” he said. “We don’t have the money to market Franklin County, and this is the first stop in order to be competitive with Clinton County, Essex County and St. Lawrence County.”

To administer the bed tax, the County Treasurer’s Office will create a how-to-comply handbook for lodging owners, collect the money and enforce the law while a seven-member Tourism Advisory Committee recommend to the County Legislature on how best to spend the money.

At first, the county’s annual $176,000 tourism budget would fund the program until bed tax started coming in.

When the annual collection reaches $350,000, the county’s contribution will gradually taper off until the bed-tax income reaches $526,000 a year.

Legislators said they expect to take in $350,000 to $375,000 a year in bed tax, using annual sales-tax figures as a model.

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