How best to use the money generated by Jefferson Countys 3 percent tax on hotel rooms has been a recurring debate since the occupancy tax was implemented more than 20 years ago. Now, with revenues booming, its back on the agenda of county lawmakers and tourism leaders, and the broad issues have changed little in the past two decades.
The revenue is divided evenly between the county and the municipalities in which the funds are generated after the county takes 2 percent of the funds for administrative fees. The law specifies only that bed tax money be used for vague, undefined tourism purposes, which leaves wide latitude for municipalities to determine how their funds are spent.
The allocation of revenue favors municipalities like the city of Watertown and the St. Lawrence River towns with their concentration of hotel and motel rooms, especially with the explosion of hotel construction in recent years. The 91 hotels in the county will have more than 2,800 rooms by the end of the year. In the city, 670 rooms have been added since 2005.
Between 2001 and 2011, countywide bed tax revenues more than doubled to $850,000, which has prompted county legislators, town officials, hotel operators and tourism promoters to take another look at how the money can be used to increase tourism. At the center of the discussion is finding a balance between spending on tourism promotion and spending to develop tourism-related infrastructure to attract visitors.
The bed tax has been invested in capital projects such as information centers or the renovation of historic buildings. It has also helped fund special events.
Most of Jefferson Countys funds support regional promotion through the 1000 Islands International Tourism Council, while municipalities have funded chambers of commerce as well as their own marketing campaigns, which can lead to duplication.
The county has a bed tax reserve fund, which some lawmakers favor holding onto as a hedge against a drop in bed tax funds. Hotel operators, though, would like the county and city to spend more on destination marketing particularly to increase tourism year-round.
As the discussion moves ahead, it is important that the county develop a reasonable plan for the benefit of the entire county.