Council discusses hotel tax increase
by By Frank Lewis
PDT Staff Writer
For at least the time being, the city of Portsmouth will not raise the hotel-motel tax. Council looked into the possibility of raising the tax from the current 4 percent to 5 percent, with the additional one percent to go to Main Street Portsmouth.
“I think it’s important for us, as the city government, to continue to support Main Street and the work that they do for the city, that the city cannot do for ourselves,” Portsmouth Mayor David Malone said. “So we’re requesting legislation be prepared to amend Ordinance 183.02 and increase the rate from 4 percent to 5 percent.”
First Ward Councilman Kevin W. Johnson gave Council a brief history of the hotel-motel tax which came into existence in 1999 at 3 percent, and eventually specified 66 2/3 percent of the funds would go to the Portsmouth Convention and Visitors Bureau, and 33 1/3 percent would go through Cultural Affairs who would distribute that money to non-profits.
“Last year this tax generated at total of $82,787, with a little over $62,000 going to the Visitors Bureau,” Johnson said. “And $20,700 was distributed through Cultural Affairs. Were this in place at the time, that would have meant that Main Street Portsmouth would have gotten approximately $20,700, which would be a great benefit to them.”
Johnson said the increase in the bill of a person staying overnight at a local hotel would be from 5 cents to 9 cents.
“Main Street Portsmouth is a critical element to downtown Portsmouth’s future from the work it does to encourage small business development, increase awareness of our downtown via advertisement, events and promotions; beautifying the Roy Rogers Esplanade, the murals, Alexandria Park, our city hall and other areas via plants, flowers, urns, etc., and constantly increasing the visibility and viability of our downtown,” the ordinance reads. “This 1 percent on local motels will not be a burden nor will it be non-competitive, given the range of other area excise taxes and the fact that our motels are few and booked constantly during the week, forcing many to look outside our county for lodging. City Council is requested to authorize the preparatin of legislation amending Codified Ordinance #183.02, increasing the rate from 4 percent to 5 percent, with this additional one percent going to Main Street Portsmouth.”
“Is there some agreement in place where the city has perpetually agreed to fund the Portsmouth Convention and Visitors Bureau?” President of Council Steve Sturgill asked.
He was told it was part of an ordinance. Sturgill asked where Main Street Portsmouth gets its money.
“They have received CIP money - $50,000 a year,” City Auditor Trent Williams said. “They’ve also applied for, as a 501(c)(3), for the Cultural Affairs grant, which, coincidentally comes from this particular fund, but it is the part that is set up for grant recipients, not as a receiver of the hotel-motel tax.”
Sturgill followed with another question.
“Did the city agree to perpetually fund both of those entities in this community?” Sturgill said.
Williams said there is an agreement with Main Street Portsmouth separate from that tax.
Second Ward Councilman Rich Saddler then upped the ante, and called on Council to increase the tax to 6 percent instead of 5, which brought about a long discussion. Saddler asked Council to choose Alternative 2 - “Modify this request,” by taking it from the proposed 5 percent to 6 percent. That proposal failed 3-3.
Kevin W. Johnson then asked to pass Alternative No. 1 - “Approve this request.”
That too failed, leaving Fourth Ward Councilman James Kalb to propose Alternative No. 3 - “Take no action.”
That measure passed.
Frank Lewis may be reached at 740-353-3101, ext. 252, or at email@example.com. For breaking news, follow Frank on Twitter @FrankLewisPDT.
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