bed tax Hotel owners fear an increase

February 28, 2012 at 12:00a.m.

and Peter H. MILLIKEN

YOUNGSTOWN

Area hotel owners are fearful an increase in Mahoning County’s bed tax could hurt their business, but at least one county commissioner favors increasing the tax from 3 percent to 5 percent.

“We need an economic- development engine,” said Commissioner Carol Rimedio-Righetti, referring to the Western Reserve Port Authority, which would receive most of the increase.

WPRA, which is funded by Mahoning and Trumbull counties, operates the Youngstown-Warren Regional Airport in Vienna.

The overall hotel room tax here would increase from 12.75 percent to 14.75 percent.

That tax currently consists of a 6.75 percent combined state and county sales tax, a 3 percent county bed tax, and 3 percent bed taxes in Canfield, Austintown, Boardman and Beaver townships.

Righetti said last spring she was opposed to raising the bed tax because of the county’s poor economic conditions.

She said she has changed her mind, however, because she is now convinced that increasing the tax will help the port authority promote county economic development.

“I want to get it done,” Righetti said, adding that she would like the commissioners to vote on the increase at their 10 a.m. Wednesday meeting.

Two business prospects she declined to name want to locate in Mahoning, and she wants the port authority to provide economic development assistance to them, she said.

Last spring, Commissioner Anthony T. Traficanti said he was opposed to a bed tax increase; and John A. McNally IV, chairman of the commissioners, was noncommittal. Neither returned calls seeking comment Monday.

If the county raises its bed tax to 5 percent, the port authority’s share would go from 2 percent to 3.5 percent and the Mahoning County Convention and Visitors’ Bureau from 1 percent to 1.5 percent, Righetti said.

That is identical to the manner in which Trumbull County divides its 5 percent bed tax, she said, though it would go against Ohio Attorney General Mike DeWine’s legal opinion from last year that stated commissioners could raise the county’s hotel and motel bed tax, but that any extra money raised must go to WRPA and not the CVB.

In 2010, Mahoning County’s bed tax raised $744,559, with $255,460 going to the CVB and $489,099 going to the port authority.

If enacted, the tax hike would make Mahoning County’s hotel room tax higher than most nearby regions, including Pittsburgh (14 percent), Kent (12.75), Canton (12) and Grove City (9), said David Kovass of the Meander Hospitality Group.

“If everyone is driving to this area and stopping off in Youngstown, what’s going to stop them from driving an extra 20 minutes and staying in Hermitage?” he said.

Raising the bed tax hinders business, Kovass said, because many hotels along the Ohio Turnpike receive a lot of “negotiated business” from travel agencies.

Lower occupancy rates, which in 2011 were about 55 percent at the county’s 33 hotels and motels, would also result in smaller staff sizes, Kovass said.

Righetti said the hotel industry should not be surprised.

“They have not been blind-sided,” she said. The Mahoning County Commissioners have discussed the possibility of raising the bed tax in public staff meetings in recent months with CVB and port authority representatives present, she said.