Hotel managers oppose revised plan

February 05, 2000

Increasing the hotel-motel tax to 6 percent from its present 3 percent would result in an estimated $923,578, based on last year's revenues.

The money would go as follows:

* Information from a state plan.

By SCOTT BUTKI / Staff Writer

A majority of Washington County hotel managers contacted in an unofficial telephone survey oppose a plan to use a hotel tax increase to help fund a stadium and pay down the county's water and sewer debt.


"It's insane. It's absurd. For God's sake, it's unholy," said Beaver Creek House Bed and Breakfast owner Don Day. "It's reached the point of absurdity."

Day said he will lobby against a proposal to increase the hotel-motel tax to 6 percent from the current 3 percent rate. The increase would bring in an estimated $923,578, based on last year's revenues.

Nine out of 10 operators of hotels and bed and breakfasts contacted said they objected to the latest proposed tax increase. One declined to state his opinion.

State Del. Robert A. McKee, R-Washington, and chairman of the Washington County delegation to the Maryland General Assembly, said Saturday the delegation is considering exempting bed and breakfasts from the tax. McKee said the exemption is being considered because the bed and breakfast owners "have been the most vocal opponents (of a tax)."

He added that in some cases the amount of tax money collected from the bed and breakfasts is not enough to offset the cost of collecting the tax.

Bharat Patel, owner of the Econo Lodge on Mason Dixon Road near Hagerstown, said he favored exempting bed and breakfasts from the tax, but was opposed to a tax increase for hotels and motels as well.

"We have three different states in a 20-mile area, and people don't mind driving 20 to 30 minutes to save a couple dollars," he said.

"I don't think they should just tax the hotel people," said Joe Bencivenga, general manager at the Venice Inn. "It's fine if they need a stadium, but spread it (the burden) around some."

"No, I wouldn't support that," Hyun Seok, manager of Motel 6, said of the new plan.

Seok had supported increasing the hotel-motel tax to 5 percent, a proposal endorsed by the Washington County Commissioners at a Dec. 14 meeting, but said 6 percent is too much.

Seok also said the problem with the argument that the hotel industry should pay an added tax because they will benefit from a stadium is that other industries, such as restaurants and stores, would also benefit without having a tax increase, he said.

David Melugin, manager of the Four Points Sheraton Hotel, supported an earlier plan calling for a 2 percent increase with only 1 percent going to the stadium, but thinks a 3 percent increase is too high.

"I don't think it is a good thing for the community," he said.

The Washington County Commissioners voted 3-2 on Dec. 14 to ask the state to increase the hotel tax to 5 percent to pay the county's portion of a commitment to the stadium.

Earlier in the month, the Hagerstown-Washington County Convention and Visitors Bureau Board voted 10-1 to support the tax increase. None of the three hotel managers on the board voted.

Despite concerns, surveys have shown hotels rarely lose business due to a room tax increase, said Ben Hart, visitors bureau executive director.

"My official position on this is that the 3 percent original tax is more than adequate to fund tourism ... and the stadium is not tourism," said Richard Pellegrino, manager of the Plaza Hotel in Halfway.

It's not fair to make the hotels pay for the stadium or reducing the county's $52.3 million water and sewer debt, he said. He does not expect to make any extra money if a stadium is built.

"It's not morally right. It's taking advantage of people who don't have much political clout," he said.

"I'm not happy," Joanne Breitenbach, owner of the Jacob Rohrback Inn, a bed and breakfast in Sharpsburg, said Friday. "We don't benefit from the stadium at all."

Gary Foreman, manager of the Hampton Inn on Dual Highway, said it's unfair to make the hotels and non-county residents fund the project and related expenses.

"I'm against them using the hotels to pay for everything," Foreman said.

Under the plan, 45 percent of money generated by the tax increase would go to the Hagerstown-Washington County Convention and Visitors Bureau, with the amount capped at $500,000. The cap would be dropped in about three years.

While he supports the tax increase to 6 percent, Commissioner Paul L. Swartz doesn't like the idea of capping the total.

Sen. Don Munson, R-Washington, said Thursday the cap doesn't have to stay.

Commissioner William J. Wivell said he doesn't mind the cap idea and isn't totally opposed to a tax increase.

"Maybe it's the lesser of all the evils out there. It is a tax increase, but it accomplishes debt-reduction,"

Commissioner John L. Schnebly said he doesn't oppose the tax increase since the County Commissioners agreed to tap that fund previously.

Mike Winberg, owner of the Super 8 Motel, said he didn't want to state his opinion because he sits on the Convention and Visitor's Board.

Staff writer Dan Kulin contributed to this report.

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