Chamber opposes proposal to shift lodging tax funds

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The Alexandria Lakes Area Chamber of Commerce is opposing a measure the state Legislature is considering because it could jeopardize an existing lodging tax that raises money for tourism and marketing.

In 1998, Alexandria took advantage of a tax option to surcharge lodging fees collected by 14 lodging establishments in the city of Alexandria.

The 3 percent tax now generates more than $200,000 per year – all of which is designated for marketing and promoting the Alexandria lakes area and its year-round tourism.

Faced with a $6 billion deficit, the Legislature is considering a bill to eliminate the lodging tax designation. The tax would still be collected, but the revenues collected would be put into Alexandria’s general fund.

In turn, it could cushion a plan to reduce Local Government Aid paid by the state to the city, according to the Chamber’s legislative committee.

That’s why in addition to the 2009 legislative policy the Chamber adopted last month, it has now added a position opposing the changes to the lodging tax.

The lodging tax legislation, known as House Resolution 2077, would shift receipts collected from its intended use to local governments for discretionary purposes unrelated to tourism or advertising, the Chamber’s written position statement notes.

“This was not the intended purpose of the lodging tax when it was passed by the Legislature, agreed to by the lodging industry and adopted by local units of government,” the statement reads. “It was designated as a tool to fund marketing and promotion.”

Removing the lodging tax revenue would be “short-sighted and unfair,” according to the Chamber.

“It will result in a decrease of our community’s ability to attract tourism and visitor dollars, and in turn it will damage the overall economic vitality of our community that is highly dependent upon tourism and visitors,” the statement concludes.

Tags: news, chamber, lodging, tax