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Sleeping booty? Bed tax may rise in Essex Co.

December 5, 2012

ELIZABETHTOWN - The Essex County Board of Supervisors is moving ahead with a resolution to increase the occupancy tax from 3 percent to 5 percent.

The idea was floated by county Manager Dan Palmer at a Finance Committee meeting last week. He said the additional revenue could be used to offset the cost of tourist-related services like the fish hatchery, which are currently being paid for out of the county's general fund, which comes mostly from property and sales taxes.

The current 3 percent occupancy tax, also called a bed tax, generates about $1.5 million annually, according to county Treasurer Mike Diskin. Ninety-five percent of current bed tax revenues go to the Regional Office of Sustainable Tourism in Lake Placid to fund tourism marketing efforts across the county. A bed tax is a tax on hotel and lodging stays.

Newcomb town Supervisor George Canon introduced a resolution last week that would amend local law to increase the bed tax by 1 percent. At Monday night's Ways and Means Committee meeting, Wilmington town Supervisor Randy Preston led a successful effort to amend the resolution to increase the bed tax by up to 2 percent, which would bring the county-wide total to 5 percent.

"Franklin and Clinton County are both pursuing a 5 percent occupancy tax," Preston said. "I know that there is going to be some businesses that may not think this is a good idea. I really think at this point in time that we need to do that. However, I would certainly like to see this (go) into a dedicated fund and not the general fund."

Preston said a 2 percent increase in the bed tax would generate about $1.2 million in additional revenue, according to county Treasurer Mike Diskin's projections. Preston said $60,000 of that would go to the county for administrative expenses, and the rest would go to ROOST. Preston said he would like to see about 25 percent of that additional projected revenue be set aside for the Crown Point-based fish hatchery, which costs the county about $290,000 annually.

The fish hatchery has been threatened with closure several times in recent years due to ongoing budget shortfalls.

"We seem to go round and round and round, year after year, about the fish hatchery," Preston said. "The fish hatchery actually needs some improvements there that could possibly benefit by the sale of fish. Because of the budget constraints we've been under, we've never been able to accomplish that.

"I personally think that fish hatchery is a great asset to the county. It generates tourism, and this is a way to pay for it."

Preston said another 25 percent of the additional revenue would go to a "tourism product development fund" for tourism-related projects in Essex County towns. He also said that 4 percent could go to a visitor transportation fund.

Forty-six percent would fund a "shoulder season" marketing fund, Preston said.

North Elba town Supervisor Roby Politi, who represents the largest town in the county and holds the weightiest vote on the county board, said he won't support an increased bed tax until he sees more specifics about the plan. North Elba generates the lion's share of occupancy tax revenue in Essex County, and as a result the Lake Placid community reaps the greatest benefit of ROOST's marketing efforts.

"There will be no way that I ever, ever support an increase in the bed tax for money to be utilized by the general fund; I'm going to tell you that right now," Politi said. "It won't ever happen. Until such time that I am clear on the particulars on how the money is to be utilized, I'm not going to support this particular resolution."

Preston said he doesn't want the additional revenue to go to the general fund, either. The general fund is a concern because the county is facing a budget crisis, with the tax levy proposed to increase 26 percent in 2013.

To increase the bed tax, county Attorney Dan Manning said the county would have to make a home-rule authority request to the state Legislature. He said 3 and 4 percent bed taxes are "pretty common" statewide, although some counties do collect at 5 percent.

"You'll have to lobby your people in Albany to push it through," Manning said.

Approaching the state Legislature for a tax increase could be tricky. State leaders have recently blocked Essex County from raising its sales tax rate from 7.75 percent to 8 percent, the rate of neighboring Franklin and Clinton counties.

Politi told the Enterprise that increasing the bed tax would amount to "Lake Placid providing the financial wherewithal to offset a problem.

"I can't tell you that I'm all that excited about it," he said. "But then, I guess if you're going to have to tax, it's always better to tax people that don't live here. It all depends on what the proposed use is for that money. If the proposed use of the money is to stoke our tourism program, which ultimately helps our hotel and motel owners, which produce some 85 percent of that money from right here, that's one thing. I'm totally against it if there's any thought whatsoever of it going into the general fund."

Meanwhile, county sales and occupancy tax collections are up this year. Diskin said to date, sales tax collections are up by about $677,000 this year compared to 2011.

"That's a big jump," he told the News. "The majority came in the winter, and then it leveled off in the spring and early summer. It picked up again in late summer, and so far the fall has been good."

Bed tax collections have increased about 7.5 percent this year over last.

"It reflects the sales tax increase," Diskin said.

Contact Chris Morris at 891-2600 ext. 25 or cmorris@



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