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Vote on innkeeper’s tax delayed for at least a month

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County council members are concerned about how much would be raised by a new tax that would go toward promoting tourism and how it would be spent, and they won’t make a decision on charging the tax for at least a month.

The board delayed a decision on approving a local innkeeper’s tax but could vote in February. The tax would add 5 percent to the total bill for guests at local hotels, motels or bed-and-breakfasts, which would be used to fund a countywide tourism bureau to promote the county and its events and attractions.

Under a new proposal being considered, nonprofits, such as sports camps where youth stay overnight, would not be required to charge the tax, the county council would get to appoint a member to the tourism board that would oversee how the money is spent, and the council would review the tax in five years to decide whether it is effective at increasing tourism. With those changes, one more council member said he now favors approving the tax.

Three council members said they were in favor of the tax, and a fourth is leaning toward a yes vote. The three other board members — Beth Boyce, Jim Eckart and Brian Walker — want more information and time before voting on the tax, which could generate about $680,000 per year for tourism marketing. If approved, local hotels and motels would start collecting the tax on July 1.

Council members have talked with local hotel operators, residents and other tourism bureaus. With the changes to the proposal, council president Boyce wanted to wait another month before voting.

“I don’t understand what the hurry is,” Boyce said.

Council member Anita Knowles was ready to vote Monday and said she was frustrated that the decision is being delayed another month. The delay will give lodging operators less time to prepare for the new tax if it is approved, she said. The county could start collecting in July, but that date could be pushed back.

“It’s a big industry, and we are not tapping into it here, and we should,” Knowles said.

Some council members still have questions about the tax. Walker questioned whether the estimated tax revenue of $680,000 per year was accurate because revenue information wasn’t gathered directly from hotel operators in Johnson County. The estimates are from a firm that tracks the hotel industry and were based on room rates and occupancy for Johnson County, officials have said.

Walker said he also wants more information about how the tourism bureau would be organized and what staff would be doing.

Council members also are concerned about how the money would be spent and want to put as much as possible into advertising, especially if the tax doesn’t collect as much as expected. A sample budget estimates the county would spend about 65 percent of the tax for advertising and marketing, with the other 35 percent paying operating costs, such as salaries of employees or office rent.

Council members didn’t set a cap for operating costs, which other counties have done, but the number of staff members or other expenses could be adjusted depending on how much money is coming in, council member Loren Snyder said.

If revenue were less than expected and the county had only $200,000 for marketing, it would still allow the visitors bureau to do some promotion, which would hopefully attract more visitors and increase tax collections, Knowles said.

Eckart wants the county commissioners to allow the council one or two appointments to the tourism commission. Under state law, the county commissioners and mayor of the largest city appoint members to a commission, which sets up the nonprofit tourism bureau and is in charge of overseeing its operation. The council should have input in how the bureau would be designed and run, since it approves the tax that funds it, Eckart said.

If council members approve the tax, they want to be sure the marketing that is being done is actually increasing tourism in Johnson County. The council proposed adding a sunset clause to the plan, which would allow the council to study in 2019 how much is being collected, how it’s being used and the effect on local tourism.

The council either could decide to keep the tax or allow it to be repealed automatically. The council took a similar approach when it approved a wheel tax in 2007, which provided money to the county, cities and towns for road projects and was renewed in 2012.

In Bartholomew County, the tax generates more than $1 million per year, which has about doubled since the mid-1990s, Columbus Indiana Convention and Visitors Bureau executive director Lynn Lucas said.

The money put into marketing in Bartholomew County has allowed the bureau to attract new youth sporting events, set up and promote architecture tours in Columbus, pursue small conventions that can meet at local hotels and attract visitors to restaurants, shops and smaller attractions in the county, Lucas said.

For example, about 100 youth sports tournaments are scheduled in Bartholomew County this year, and each event attracts hundreds of children, their parents and other family to the county. Staff from the visitors bureau are able to make contact with groups organizing events and share information about Columbus in an effort to get them to bring the event to the city.

Visitors pump money into the local economy, including one instance in which shops at Edinburgh Premium Outlets noticed a 5 percent jump in sales on the weekend of a large girls softball tournament, Lucas said.

Because tourism has increased and the county is attracting new events, Bartholomew County has been able to attract at least eight new hotels since the tourism bureau was formed, she said.

“(Hotels) do not get involved in areas where tourism doesn’t do well,” Lucas said.

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