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Council votes down innkeeper’s tax

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Too many questions about a new tax that would be paid by guests at local hotels and motels remain unanswered, so for now the idea has been turned down.

Money raised from the 5 percent tax on hotel and motel bills would be used to start a visitor and tourism bureau, which would help promote the county and its attractions.

After three months of discussion, local officials still have questions, including how much money the tax would raise and how it would be spent.

The innkeeper’s tax is not dead, but no timeline has been set for when the proposal could be voted on again. The county first will form a committee to research the tax and tourism bureau and answer officials’ questions.

Johnson County Council members turned down the tax with a 3-4 vote. Council members Jim Eckart, Beth Boyce, Brian Walker and John Myers voted against the tax.

Seventy-one of Indiana’s 92 counties have an innkeeper’s tax, including Marion County and all of the surrounding counties, except Johnson County. Proponents of the tax said a visitor and tourism bureau would allow the county to market itself through advertising and a website with information about local attractions and events. The staff also would try to book larger events, such as conventions or business conferences.

The county has discussed the tax in the past, but the proposal has not been approved. This week, a Greenwood hotel operator estimated the tax would bring in about $350,000 per year, instead of the $600,000 originally estimated by proponents. Officials also questioned whether the money from the tax could be spent on building projects, and others want a more detailed plan on what a tourism bureau would do.

Franklin College board member Steve Huddleston raised concerns about how the tax would impact the college, such as whether campus visitors, students on recruitment visits, visiting professors or people attending academic camps would be charged.

Walker wants a more defined plan for how the tourism bureau would run. He wants to know more about how the tourism bureau will use the tax dollars it receives and how it will work with other local development groups, such as Johnson County Development Corp. and Greenwood and Franklin chambers of commerce.

Eckart wants to know how much money the tax will bring in. A marketing firm told the council that tourism marketing increased revenue by about 3 percent in Hancock County over two years.

Eckart wants to know whether the increase is due to marketing or improvements in the economy.

The manager of Candlewood Suites hotel in Greenwood, Phil Klaus, presented estimates based on recent hotel occupancy data that showed the tax likely would raise only about 60 percent of what had been estimated before.

Those financial details are important, Eckart said. He also said he doesn’t have enough information about what aspects of the county a new tourism bureau would highlight and try to grow.

“What I’ve gotten asked for is a tax. I’ve not been asked to support a vision,” Eckart said.

Myers wanted to know whether the innkeeper’s tax can be used to support building projects, such as helping pay for improvements at local parks or attractions.

The county had discussed in 2009 using an innkeeper’s tax to pay for improvements at Hoosier Horse Park and Johnson County Park. That proposal would have required approval from state lawmakers, but the tax was voted down locally before ever making it to that step.

Myers wasn’t sure the county could legally use some of the money for projects without getting approval from the state legislature. He also was concerned about the questions Huddleston raised about the impact on Franklin College.

Those questions need to be answered before the council approves the tax, he said.

“We need to slow down and do some more research,” he said. “We can still get there and get the answers,” Myers said.

A new committee will continue researching the tax and how it can be used and gather more data about what effect tourism marketing has in boosting the local economy.

All of the county officials, including the council, commissioners and treasurer, should have been working together from the start in December instead of proponents trying to push the proposal without a collaborative plan, Boyce said.

When the discussion began, some council members did not have any background information about innkeeper’s taxes and tourism bureaus. The committee can help clarify issues, and the council could consider the proposal again in the future.

“I can’t say I’ll never get there, but I’m not there tonight,” she said.

The vote was a defeat, but council member Anita Knowles was encouraged that the council members who voted it down were open to gathering more information. Knowles plans to do more research into specific issues that council members had, such as whether money can be used for projects.

“That shows hope that the people on the council that voted no still want to continue discussing and researching the innkeeper’s tax,” she said.

Residents in favor of starting a tourism bureau should not be discouraged by the initial defeat of the proposal, said Larry Heydon, Johnson Memorial Hospital chief executive officer and one of the leaders of the Aspire Johnson County group, which initially researched the idea.

The council is open to discussion, and the group can continue working to fill in the holes of the plan, he said.

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