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Hotel owners mixed on Essex?County bed tax hike

December 8, 2012

LAKE PLACID - A proposal to increase Essex County's occupancy tax to 5 percent is drawing a mixed reaction from local hotel owners.

The county's Board of Supervisors is considering a resolution that would increase the current 3 percent occupancy tax, or bed tax, by up to 2 percent. All but two counties in New York state have a bed tax on hotel and lodging stays.

Ninety-five percent of Essex County's current bed tax funds the Lake Placid-based Regional Office of Sustainable Tourism, which markets the region to potential visitors.

"It doesn't concern me at all; I support it 100 percent," Dan Brownell, whose family owns Gauthier's Saranac Lake Inn, said of the proposed bed tax increase.

"It's more money for the area for marketing," he added. "They (ROOST) have shown that every dollar they spend on marketing, it comes back 50 or 60 times. More dollars that way would be great for the area."

Art Lussi, whose family owns the Crowne Plaza Resort and Golf Club in Lake Placid, said he's "fervently against" increasing the bed tax.

"I think it would be a huge mistake," he said. "To tax people who are supporting our community, our Park, our existence - at a time when we're in a recession - I think is one of the craziest ideas I've ever heard in my life."

The current proposal would bring in between $1 million and $1.2 million in additional revenue, according to county Treasurer Mike Diskin's projections. Wilmington town Supervisor Randy Preston said Monday he'd like to see 25 percent of that go to help run the county's fish hatchery in Crown Point. He said the rest would go to special funds for tourism product development, offseason marketing and visitor transportation.

Supervisors still need to work out details and language of the proposal, and the state Legislature would have to grant the county home-rule authority to increase the tax.

Essex County implemented its bed tax in 1998 to help fund regional marketing efforts. Some hotel owners, like Peter Holderied of the Golden Arrow Lakeside Resort in Lake Placid, were initially concerned that it would drive away potential visitors. At the time, few places outside of New York City charged such a tax.

"Since then, everybody has it," said Holderied, who is also a member of the Lake Placid village Board of Trustees. "It's expected when people travel now."

Holderied said he would support an increased bed tax as long as the current 3 percent continues going to ROOST.

"They're constantly trying to raid that fund," he said. "The rest of the county, they're going to want it for themselves. ... If they use it, somehow make it contractual, only for county marketing, and leave the other 3 percent alone, I wouldn't have a problem with that. I just don't see that happening. I don't think the rest of the legislators will vote for it if it can only be used for marketing, in my opinion."

Jim Murnane, owner of the Best Western Mountain Lake Inn in Saranac Lake, said he's not sure if he's for or against increasing the bed tax. Murnane, like Holderied, said he feels that county lawmakers have been trying to tap into bed tax revenue ever since it was implemented.

"The law was written that the funds were strictly to go to tourism promotion," Murnane said. "People have tried to kind of bend their way around that, notably the other townships in Essex County. I don't want to see that change."

Murnane said additional revenue from an increased bed tax should not go to the general fund, and it shouldn't be used to support things like the fish hatchery.

Lussi said the county should instead consider implementing a bed tax on people who rent second homes and condominiums.

"It's crazy that all of those visitors don't have to pay an occupancy tax like everyone else," he said. "Specifically, Lake Placid has had a huge contingent of second home and condominium rentals in the past 15 years. It's emerged as a requested, desired market. And many of the second home owners have hired local Realtors to rent those properties for them when they're not here to help either offset mortgage costs or annual taxes.

"If they're looking to create any economic boost for the tourism bureau, that's where I would suggest they go, not tax the people that have been supporting us through good times and bad."

Murnane said since the bed tax took effect, he hasn't lost any business because of it.

"You don't get much kickback from it from the guests," he said. "They'll ask what it is occasionally when they're signing their receipt and they'll see two separate lines of tax, one being sales and one being the bed tax. They'll ask what it is occasionally, but it's certainly never cost me any business in any way, shape or form."

ROOST President Jim McKenna said the bed tax has been effective. He said he understands the county's budget woes and the need for additional revenue, but his office's stance has always been that the best use of the bed tax is as an investment.

"We've shown very clearly that it adds more to the bottom line than just wiping out expenses," McKenna said. "I think a lot has to do with whether or not it's the appropriate time to increase taxes - I don't know that. ... It's more important that we evaluate what we have."

Lussi said he wasn't thrilled about enacting the bed tax to begin with, but he's learned to live with it. He said he realizes bed tax revenue funds nearly all of ROOST's revenue, but he questioned how it's the organization uses it.

"With that money, what have you done for meetings, conventions? If you look at the past 10 years, our community has become more event driven than conference driven," Lussi said. "Hockey is here more than 20 weeks a year. ... If you look at the 10 weeks in the summer, you have the Lake Placid Marathon, then you have the two weeks of horse show, then you have the Ironman, rugby, lacrosse, women's hockey festival, figure skating festival - if you look down our calendar on an annual basis, there's not a lot of open weekends that aren't based on an event.

"If we're all events through the whole year, then what are we using this money for? I would hope it's to market the Sunday-through-Wednesday conferences. But I haven't seen that. This is harsh; I'm being tough right now. If that bed tax had been used to draw all of these events, I would be supportive of raising it. But the bed tax is used to put on the event, which I don't think is right. They use staff to put on Ironman with some of this money. I don't think that's the intent of the bed tax. ... I know I'm going to take a lot of heat, but I got to tell it like it is."

McKenna said ROOST's marketing plan, available online at, gears itself to the offseason and mid-week periods.

"It gears itself to the non-busy times," he said.

McKenna said many events - like bass fishing tournaments on Lake Champlain and Ironman - have costs attached to them. He said ROOST keeps track of those expenses and justifies them in its paperwork.

Contact Chris Morris at 891-2600 ext. 25 or



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