Excise tax on new hotel debated
- Published: December 4, 2014
At their Nov. 17 meeting Village Council members considered whether to impose a 3 percent excise tax on customers at the Mills Park Hotel when it opens in mid-2015. This was a continuation of an earlier discussion of the tax, and Council recently received word from Mills Park owner Jim Hammond that if the tax is imposed, he could stop construction on his hotel.
“He believes it’s not in his best interest to proceed with the hotel if we have the tax,” Village Manager Patti Bates said, following a conversation with Hammond.
The hotel, currently under construction, will have 28 rooms, a banquet hall and a cafe. The tax can only be levied on shortterm-stay businesses with five rooms or more, according to Bates, so only the Mills Park Hotel and the Arthur Morgan House would be candidates.
The purpose of the hotel is “to provide much needed affordable lodging in Yellow Springs,” according to the letter from Hammond, who said the hotel will benefit the village with new jobs and property tax estimated at $50,000 per year.
However, the new hotel is part of a trend toward the village becoming a tourist destination, and that carries costs to villagers, according to Council member Lori Askeland.
“Having taxes on those who visit is a way to recoup” some of those costs, she said.“We have serious budget issues and there are limited ways to raise revenues.”
Council member Gerry Simms shared Askeland’s concern, stating that before retirement he traveled extensively for his job, and generally paid an excise tax on hotel rooms. Simms requested that Bates research area hotels to find if an excise tax on hotel accommodations is standard practice, and if so, to go ahead and pass the tax.
However, Council member Marianne MacQueen urged Council to hold off on the tax, after having a conversation with Hammond. Customers will already pay the 7 percent state sales tax and a 3 percent county tax on their rooms, according to Hammond, raising the total taxes to 13 percent if an excise tax is imposed.
“I recommend holding off the tax for a while, for goodwill if nothing else,” MacQueen said., stating that the gesture would make a business-friendly statement.
But the Village has already made about $250,000 in improvements to the neighborhood sewers, water lines and electricity specifically for the new hotel, according to Electric and Water Distribution Superintendent Johnnie Burns.
Council members agreed to hold off on imposing the tax initially, but to gather information regarding standard practice in the area.
In other Council business:
• Council passed a resolution to allow the newly reconstituted Environmental Commission to include one member who works in Yellow Springs but lives elsewhere. Council approved the new EC members, who are Jessica D’Ambrosio, an Antioch College faculty member who lives out of town; environmental scientist Duard Hedley; environmental scientist Tom Dietrich and landscaper Nadia Malarkey. MacQueen will serve as commission chair for the first year but will pass the chairmanship on at that time, since Council members are discouraged from chairing the commissions they sit on.
• Council passed the first reading of an ordinance that adds a readiness for service charge of $5.70 a month for the first 1,000 gallons of sewer service use.The change is designed to bring the sewer fund back into the black after 2014 deficit spending.
• Council passed the first reading of an ordinance that increases the base charge for trash collection by about $1.56 a month for Level one solid waste use.
• Council passed a resolution that accepts the principles promulgated by Next Century Cities and authorizes Manager Bates to explore partnering with the organization, which provides advice and guidelines for towns that adopt municipal broadband.
• Council passed a resolution that authorizes Bates to elicit bids for improvements to the Village skatepark.
• Villager Glenn Watts urged Council to move ahead with improving water lines in the “bottleneck” area in the south side of town in order to improve fire flow.
Council’s next regular meeting will take place on Monday, Dec. 1.
Less salt on streets
At Village Council’s Nov. 17 meeting, Streets Crew Superintendent Jason Hamby warned villagers that there will be less salt on local roads during wintry weather.
“No longer can we salt every street,” Hamby said, stating that this winter main thoroughfares will be plowed and salted, all streets will be plowed and then spot-salted, and intersections will be salted.
“We’ll try to conserve salt as much as possible,” Hamby said.
The situation is linked to a statewide salt shortage, according to Hamby, and a resulting spike in price. Currently, road salt is almost twice as expensive as it was last year, he said.
Council President Karen Wintrow advised villagers to be especially careful on bad-weather days due to the salt shortage.