Tuesday, March 19, 2002
Convention center deal fine-tuned
Hoteliers oppose new tax
By Dan Klepal, dklepal@enquirer.com
The Cincinnati Enquirer
A compromise is close that will get two key Hamilton County lawmakers to back the financing plan for the expansion and renovation of the Albert B. Sabin Cincinnati Convention Center.
Still, a bus load of hotel general managers from the suburbs plan to criticize the proposed bill during a State Government Committee hearing today in Columbus.
The centerpiece of the $198 million plan involves Hamilton County raising its hotel-motel tax by 4.5 percentage points from 3 percent to 7.5 percent.
Commissioners have voted to do that, but they need a law passed before the tax can be raised.
State Rep. Bill Seitz, R-Green Township, has been negotiating to get city and county agreement on several regional issues namely a 30-year extension of the water contract between Cincinnati, the county and other municipalities before agreeing to back the bill.
Committee Chairman Ron Young has said the bill will not move to a vote by the entire House until local state lawmakers support it.
Mr. Seitz said that agreement is close.
The expectation is that we'll be in a position to pass the bill this week, Mr. Seitz said. I'm satisfied that we're making progress.
Patricia Clancy, R-Colerain Township, who is on the State Government Committee, said she expects a vote on the bill in committee. If it passes, the full House could vote as early as Thursday.
The bill was scheduled to be heard in the committee last week, but was delayed so lawmakers could work on a compromise.
I think we've very close, said Ms. Clancy, adding that she now supports the proposed law. It's decision time.
Mr. Seitz said he expects two amendments to the proposed law:
Allowing the city to raise its hotel-motel tax above the current 3-percent maximum.
Allowing county commissioners to decide how to divide tax revenue between convention and visitor bureaus, when more than one exists in a county.
Hoteliers in the suburbs want to create their own convention and visitor bureau.
Raising the county's hotel-motel tax will raise about $7.8 million per year. The city's doubling of its tax rate, to 3 percent, will generate an additional $1.3 million.
The rate hikes mean that most lodgers will pay a 16.5-percent tax in Hamilton County. That's because there is a 6-percent countywide sales tax, and most hotel rooms are in cities which, like Cincinnati, have their own 3 percent tax.
Hotel managers in the suburbs believe the higher tax rate will put them out of business because conventions will avoid coming to town and other lodgers will drive to northern counties with lower tax rates.
In addition to the amendments, the city and county have agreed to negotiate how to guarantee $141 million in construction debt; the city has promised a 30-year extension of the water contract; and both sides will begin talking about transfering operations of the Metropolitan Sewer District to the county.
Commissioner Todd Portune, who along with Cincinnati Mayor Charlie Luken drafted the financing plan, would like to create a city-county steering group to discuss regional issues.
Still, there will be heady opposition to the bill.
Mark Schutte, general manager of two Red Roof Inns in Sharonville, said about 30 hoteliers from the suburbs are taking a bus to Columbus to testify against the bill.
We cannot survive with a 16.5 percent tax rate, Mr. Schutte said. It will give us the third highest tax rate in the nation. There's a lot of political pressure at play here.
Common sense and economic sense aren't in play.
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