Lodging tax hike discussed

Published 12:00 am Tuesday, October 8, 2002

A one percent tax increase on lodging in Austin has received the approval of the Convention and Visitor's Bureau board of directors, said director Holly LaVallie.

At Monday's finance and personnel committee, she asked for the city's support.

The Convention and Visitor's Bureau would like to raise the tax in order to increase its revenue in the future. The bureau is climbing out of debt from earlier in the year, but LaVallie said it's within a couple thousand dollars of getting out of the red.

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Currently those staying at an Austin hotel pay a 9.5 percent lodging tax, 6.5 percent of which comes from the state and 3 percent of which comes from the city. The CVB would like the city's portion to be raised to 4 percent.

Currently this tax is split between the CVB and city. The CVB receives 98 percent of the tax. With the tax raise, the CVB would gain about $37,000, annually, LaVallie said.

The proposal received unanimous support on the CVB's board, in which two of the members represent hotel properties -- AmericInn and Torgeson properties, owner of the Holiday Inn and Days Inn.

"They really sold to their owners the proposal and why it was necessary for the city," LaVallie said.

LaVallie is looking for support from the city and county before she proposes the tax in the state legislature. She said there isn't a guarantee that the tax will pass at the state level, but the support of the city would help.

"If I don't have the city's support, I won't get anywhere," she said.

She also emphasized that the tax would only affect those staying at a hotel.

"The thing that I wanted to stress the most is that this isn't a tax on my neighbors or your neighbors. It's an increase on taxes of people coming to town," LaVallie said.

Council member Dick Lang disagreed. He said every small increase adds up and may discourage people from staying in Austin. He also said that residents stay in hotels sometimes for children's birthday parties or other celebrations.

"Taxes affect all people regardless of where you're from," Lang said.

Council member Mickey Jorgenson, as well as Dick Chaffee and Wayne Goodnature, supported the increase.

"We have a wonderful free attraction that brings in tours and makes the job of the CVB bigger," Jorgenson said.

Mayor Bonnie Rietz suggested finding out what the public thinks of the tax before deciding anything. Goodnature agreed, as long as residents knew that the tax was only on the cost of a hotel room.

The committee agreed to table the request for a month until they assess what the general public thinks about it. Residents can voice their opinion on the topic at www.ci.austin.mn.us.

Cari Quam can be reached at 434-2235 or by e-mail at cari.quam@austindailyherald.com