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Mahoning County hotel bed-tax decision tabled until after election
YOUNGSTOWN
After hearing a chorus of protest from local hotel and motel operators against a proposed bed-tax increase, Mahoning County commissioners deferred for at least a week a decision on the matter.
That means there’ll be no action on the controversial issue until after Tuesday’s primary election.
In that election, Commissioner Anthony T. Traficanti, who opposes the tax-increase proposal because he thinks the lodging industry already provides enough tax revenue, faces a contested Democratic primary race.
Traficanti said he thinks there should be public hearings on the proposed increase to “give the public a chance to vent.”
A parade of speakers from the local lodging industry denounced the proposal to raise the county’s hotel and motel bed tax from 3 percent to 5 percent at Wednesday’s regular commissioners’ meeting, which drew a standing-room-only crowd to the county courthouse basement meeting room.
“For the good of this county, for the good of its businesses and its voters, we urge you not to hurt us and not to enact this tax” increase, Mike Naffah, owner of the Hampton Inn & Suites in Canfield, implored the commissioners.
Although they deferred their vote on the tax increase, the commissioners unanimously approved an agreement with Western Reserve Port Authority to provide economic and community development services for Mahoning County.
The port authority, which is funded by Mahoning and Trumbull counties, operates the Youngstown-Warren Regional Airport in Vienna.
John A. McNally IV, chairman of the county commissioners, who is not seeking re-election this year, said he is leaning in favor of a bed-tax increase, but he added that he isn’t sure how much of an increase he favors.
McNally said he voted to defer the tax decision, which was on the meeting agenda, to allow more time to study the issue.
“Their mission is to serve as the economic-development arm for Mahoning County. To do that, they need additional funding,” McNally said of the port authority.
The tabled resolution would have raised the tax from 3 percent to 5 percent for three years beginning April 1.
“It’s time for the commissioners to make a decision one way or another and proceed forward,” McNally said.
The commissioners’ next meeting will be at 5 p.m. next Thursday at the Mahoning County Board of Disabilities Centre, 153 Javit Court.
Commissioner Carol Rimedio-Righetti, who opposed a bed-tax increase last year because of the area’s fragile economy, now supports it because she said she’s been convinced the economic-development benefit from raising it will be substantial.
Two-thirds of the county’s bed-tax revenue now goes to the port authority and one-third to Mahoning County’s Convention and Visitors’ Bureau. In 2010, the county’s bed tax collected a total of $744,559.
If the tax is raised an additional 2 percent, the port authority would get 70 percent of the total collections, and the Mahoning County CVB would get the remainder, McNally said.
Naffah told the commissioners the proposal to raise Mahoning’s bed tax by 60 percent would bring the county’s total hotel tax rate from 12.75 percent to 14.75 percent, making it one of the highest in Ohio and placing it above the national average.
“The lodging industry is the third-largest employer in our county,” Naffah said. “By raising this tax, you are jeopardizing $125 million in wages that are paid to the citizens of Mahoning County,” he added.
If the tax increase results in a drop in hotel occupancy here, there will be a trickle-down effect that will reduce business at restaurants and shopping centers and reduce county sales-tax revenues, Naffah said.
Michelle Janci, sales manager at the Hampton Inn in Austintown, said she opposes a bed-tax increase because it will cause group hotel occupancy to decline.
Recently, she said her hotel lost occupancy from two major bus-tour companies, which took their passengers to Grove City, Pa., hotels, where the total lodging tax is only 9 percent.
Not everyone speaking before the commissioners opposed the tax increase, however.
Glenn Holmes, mayor of McDonald and president of the Mahoning River Mayors’ Association, spoke in favor of the tax increase.
“We believe it is time to shift the focus to growth and future sustainability of the economic-development initiative of the Western Reserve Port Authority,” he said.
“The estimates of adding an additional 2 percent could mean hundreds of thousands of dollars generated by transient guests at hotels and motels in the [Mahoning] Valley,” Holmes added.