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Niles council passes motel bed tax
By Jordan Cohen
NILES
With city finances in the throes of fiscal emergency, council, meeting in special session Tuesday, unanimously passed a 3 percent lodging tax on city motels that it will begin levying in October in hopes of easing its revenue shortfall.
There are three motels within city limits. A fourth, a Hampton Inn, is expected to open in 2016.
Niles joins Liberty and Howland with 3-percent occupancy taxes – the maximum allowed by state law for townships and cities. Trumbull County has a 5 percent tax that funds the county tourism bureau and the Western Reserve Port Authority, which oversees operation of Youngstown-Warren Regional Airport in Vienna.
Giovanne Merlo, recently named auditor, was reluctant to estimate the amount of annual revenue the tax will generate. “We have to figure out what the occupancy rate is at each of the motels before I can come up with figures,” Merlo said.
He noted that at the Marriott Residence Inn at the Eastwood Mall, residency has been reported in excess of 95 percent. “We would get 3 percent of whatever they charge for each room that’s occupied, and that could be significant,” he said.
Merlo said that because of the time frame, the city cannot begin receiving revenue from the tax till December.
The occupancy tax was not included in Mayor Ralph Infante’s 35-point plan to get the city out from under fiscal emergency. Infante said the deadline for submitting the plan earlier this year did not allow enough time for the city’s law director to research the tax.
Stephanie Sferra, tourism bureau executive director, said the bed tax collected from a significantly larger number of motels generated $298,000 in 2014.
Howland Township’s bed tax generated more than $154,000 in 2014, said Darlene St. George, township administrator, who said revenues tend to fluctuate because of occupancy. “In 2013, we collected nearly $171,000,” St. George said.
Liberty’s bed tax collection last year was $140,000 according to its fiscal office.
The new auditor also will have to contend with some other major financial issues.
He told council during Tuesday’s special meeting that safety forces have been under-funded by $800,000 for the balance of the year. The Vindicator reported earlier this month that funds to pay firefighters will run out by Sunday.
Council approved transfer of more than $470,000 from other accounts to help cover the shortfall pending approval by the Ohio Department of Taxation and the county common pleas court.
Merlo said he’ll be meeting with state auditors later this week to try to find the remaining $330,000.