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Sun., Oct. 4
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Jefferson County bed tax revenue continues to grow


The amount Jefferson County collects in “bed tax” every year has effectively doubled in the last decade.

In 2001, it was $430,000. In 2011, it was more than $850,000.

Where this money comes from and where it goes is a matter that was decided in March 1988, shortly after the first expansion of Fort Drum brought more visitors to the area. The “bed tax,” or occupancy tax, as it is formally known, is a 3 percent tax that is charged whenever a person rents a hotel room. By law, all the revenue generated by the tax must go toward promoting tourism in the region.

The county retains 2 percent of the revenue to pay administrative fees; 49 percent goes to the municipality in which the hotel is located, and the remaining 49 percent stays with the county.

The county has seen an explosion in hotel construction over the last five years. By the end of 2012, it will have 2849 rooms across some 91 hotels. In Watertown alone, 670 rooms have been added since 2005, resulting in an increase of more than 240,000 available nights per year.

According to Jody L. Pettit, general manager of Hilton Garden Inn, 1290 Arsenal St., “Watertown is a very favorable location right now regionally because we have so much new product online at reasonable rates.”

Business is good for the hotel, which takes in money from a diverse array of guests.

“Weekends are about 90 percent Canadian. Weekdays right now, we are 80 percent corporate and 20 percent transient,” Mrs. Pettit said.

Corporate guests, who often book extended visits, are generated by local business or are soldiers who come to train on post.

The hotel is busiest in the summer and struggles a bit in the winter due to the drop-off in tourism.

The municipality is free to disburse the funds as it sees fit, though money must go toward a tourism-related enterprise.

Jefferson County sends the bulk of its funds to the 1000 Islands International Tourism Council.

Gary S. DeYoung, executive director of the council, said that a decade ago, the county had to use money from the general fund to meet the expenses of the tourism council.

“Now, the occupancy tax more than covers what they’re putting into our program,” Mr. DeYoung said.

Mrs. Pettit, who also is the vice chairwoman for the council, said she would like to see some stabilization of the market.

“We could have less seasonality by having more demand. We create more demand through marketing and advertising,” she said.

Toward that end, Mrs. Pettit said she would like to see the city of Watertown use a larger portion of its bed tax revenue to market the city as a destination.

“In my opinion, the city should be putting a percentage annually of that fee into specific Watertown marketing. That’s what the hotels would like to see,” she said.

This marketing would include targeting bus tours, associations and sports teams, pitching Watertown as a viable competitor with Utica, Syracuse and Rochester for tourists’ dollars.

The hotel, like others in the area, saw a spike in business over the Thanksgiving weekend. However, Mrs. Pettit said she also would like to see an effort to market Watertown as a year-round shopping destination.

“Black Friday is one day. I have 364 more to sell,” she said. “You’re not going to be able to sustain this many hotels with a significant occupancy targeting one or two events here and there. It has to be more of a campaign towards a platform.”

In its 2013 budget, Jefferson County has indicated that it expects an estimated $420,000 from the occupancy tax.

Asked if the increase in occupancy tax revenue has led the county to consider rewriting the law so the funds could be used in other areas, Deputy County Administrator Michael E. Kaskan stressed the functionality and importance of continuing to support tourism promotion.

“There is plenty that can be done and plenty that is done every year to promote tourism, and I think we’re spending the money wisely,” he said.

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