The Madison Mayor and City Council put a Hotel/Motel tax increase back on the table last week after a narrow vote to approve a two percent increase was squashed last January by Morgan County’s delegation, Representative Dave Belton and State Senator Burt Jones.
Belton and Jones refused to take the tax increase before the state legislature to finalize the increase from 5 percent to 7 percent. Belton claimed the council must have a “unanimous, or near-unanimous” vote in order to get approval from the legislature. The council passed the tax increase in a 3-to-2 vote, with Councilmen Rick Blanton and Joe DiLetto opposing the increase. However, the entire council as a whole signed a letter objecting to the delegation’s refusal to honor the vote. But the protest was to no avail.
Now the council is debating the tax increase once again, with supporting council members hoping to achieve unanimous vote for the measure.
Ellen Sims, director of the Madison-Morgan Convention and Visitors Bureau (CVB), appeared before the board Friday morning to make the case for increasing the Hotel Motel Tax. A Hotel/Motel Tax is a fee tagged on to the price of lodging rooms, paid for by the customer. The CVB, which promotes Madison and Morgan County, is funded through the Hotel/Motel Tax, which is currently at 5 percent. According to The City of Madison, “The Madison-Morgan County Convention & Visitors Bureau (CVB), a nonprofit corporation partially funded through Madison’s hotel/motel tax, guides the very successful community tourism effort. The CVB employs a full-time director. In addition to operating the Madison Welcome Center, the CVB coordinates all regional marketing initiatives and concentrates upon promoting Madison and Morgan County to both national and international visitors. Tourism has become Madison’s leading economic engine and is instrumental to local economic vitality and community development.”
But previous efforts to raise the Hotel/Motel Tax drew the ire of the local hoteliers, who formed the Madison-Morgan Lodging Association (MMLA), headed by Mike Conrads, to oppose raising the rate.
This time around, the council is considering a compromise by only raising the rate to 6 percent—a one percent increase.
“Maybe we start off with a more modest increase,” said Councilwoman Chris Hodges at last Friday’s work session. “Maybe we start there and see how it goes.”
While the council is discussing the tax increase again, they may end up in the same dilemma as they did back in January. Councilmen Blanton and DiLetto remain on the fence and want to see more data justifying the increase.
“I would like a lot more information on how this will affect the owners of the hotels and how they feel about that now,” said DiLetto.”I need to know exactly how this money will be used–how the budget will be broken down. To make me warm and fuzzy, you are going to have to dig deeper with the budget.” said DiLetto.
“I still have concerns about this and would like to see more information,” said Blanton.
Sims explained the CVB’s current efforts to promote Madison and Morgan County with a budget of $200,000 a year. Sims argued that it’s becoming more difficult to compete with surrounding communities who have increased the Hotel/Motel Tax up to 8 percent. “I am going to digest this and talk some of the hoteliers,” said Blanton. “I remember that was discussed last year, that the MMLA wanted to work hand and glove with the CVB, because we are all aiming toward the same thing, which is to get more heads in beds.”
“I am a big fan of a consumption tax anywhere I can get it, because it relieves the pressure from local citizens,” said DiLetto. “But I think it’s a valid concern some of these hoteliers have and I am going to listen to them.”
In January, Mike Conrads objected to the tax increase on behalf of the Madison-Morgan Lodging Association (MMLA), which is made up of local hoteliers, who worried the increase Hotel/Motel Tax would eliminate Madison’s competitive edge, arguing the lower rate allows hotels to charge slightly cheaper rooms than surrounding communities.
Hodges urged the council to look at the bigger picture.
“It just goes back to nobody likes a tax increase, and I get that,” said Hodges. “But this is money that is mutually beneficial to the community and to the hoteliers,” said Hodges.
Sims hopes to the increase will pass to empower the CVB to expand their marketing capabilities while promoting Madison and Morgan County, and promised to gather more data for the council to review.
“Tax or no tax, we will continue to do what we are good at and be good stewards of this tax money, but at some point in time, I think there needs to be some movement forward on this issue,” said Sims.
The council will revisit the issue at a future council meeting for further discussion and consideration.