JOHNSTOWN - As Fulton County government moves ahead to impose a 4 percent hotel-motel occupancy tax in the county, many in the local overnight accommodation business aren't exactly thrilled at that prospect.
"We have several concerns over the legislation that the supervisors adopted," says Johnstown Holiday Inn General Manager James Landrio.
Carol Walker of the smaller, 16-room Blue Moon Motel in Vail Mills definitely doesn't want to see another 4 percent tax on her customers.
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Johnstown Holiday Inn Manager Jim Landrio, left, checks in customer Amy Sanjurjo at the front desk on Tuesday.
The Leader-Herald/Bill Trojan
"I'm not impressed," she said. "I think enough is enough. It would have a big effect on our business."
The Fulton County Board of Supervisors voted April 9 to seek state Legislature approval for a new county hotel-motel occupancy tax through state Sen. Hugh T. Farley, R-Niskayuna, and state Assemblyman Marc W. Butler, R-Newport. They are sponsoring the "home-rule" legislation. Such funding is supposed to be dedicated to tourism or economic development activities, and Fulton County estimates it can raise $80,000 to $120,000 annually through the new tax.
A total of 47 out of 57 upstate counties already have the tax. The so-called "bed tax" would be set for each overnight guest's accommodation at places in the county providing lodging, including hotels, motels and bed-and-breakfast inns. Fulton County wants to set its tax at 4 percent per each night.
In the local area, Montgomery and Schoharie counties each already have 4 percent bed taxes. Saratoga County has a 1 percent bed tax, although the city of Saratoga Springs has its own 5 percent rate. Hamilton and Herkimer counties have no such taxes.
Elsewhere in the Capital Region, Albany has a 6 percent bed tax, Schenectady County has a 4 percent tax and Rensselaer County's bed tax is set at 3 percent.
County Treasurer Terry Blodgett said his office will collect the new bed tax, just like it does for sales tax, and the new tax wouldn't just be for hotels and motels.
"Anybody who lodges people overnight would have to pay this, even seasonal rentals," Blodgett said. "I think it's a great thing, I really do."
Blodgett said the bed tax will decrease the cost of the county tax levy that is annually spent on tourism.
But Landrio said those associated with his 100-room hotel are also wondering why the county started out by seeking a 4 percent occupancy tax rate, which he noted is "one of the highest" rates for a bed tax. Several of the counties have bed tax rates of 3 percent or lower.
"The monies are not going to be used solely for tourism and they're at the discretion of the Fulton County Board of Supervisors," Landrio said.
He said his hotel is concerned any bed tax money won't be going directly to "support our industry."
"They're putting a tax solely on our business," he added.
Landrio said the Holiday Inn also is upset the Board of Supervisors didn't contact him or "reach out" to the other two major sites with overnight accommodations in Fulton County. He said those sites are the Super 8 Motel and Microtel Inn & Suites, both also located on Route 30A in Johnstown. He said only one member of the board contacted him.
He also said some supervisors made public statements that bed taxes only impact visitors, when in fact many local businesses and families seek local overnight accommodations.
County Administrative Officer Jon Stead said the Board of Supervisors has been working with the Fulton County Regional Chamber of Commerce & Industry, which "seems supportive" of the bed tax.
"Its been discussed quite a bit over the years," Stead said.
Landrio said dedicating any new potential bed tax revenue to tourism efforts is not necessarily "a bad thing." But he said the phrase "economic development" leaves a "gray area" where the new tax revenue could be put into.
Landrio also said the county hasn't addressed how the new bed tax would be administered. He asked if the county would "force accounting work" on his hotel, adding he estimates his establishment will have to pay at least $2,000 to change computer software to deal with the added tax. He also wondered if he will have to increase payroll.
Landrio said that other counties with bed taxes set up bed tax advisory committees to oversee disbursement. He said if the hotel and motel industry is going to be "burdened" by the new tax, it should have a voice in such a committee.
"I really feel that's unfair," he said.
Super 8 Motel Manager Amar Patel feels what's unfair is the amount of extra money his customers will have to pay with a 4 percent occupancy tax. He said that coupled with an 8 percent state sales tax rate he's already charging, his customers in effect will be paying a 12 percent tax on overnights.
"It's their decision," Patel said, but his business thrives on promotion of lower rates.
Patel estimated if someone comes to the Super 8 and expects a $60 bill, he will have to pay extra money out of pocket.
"It's a direct cost to the guests who stay with us," he said.
One of the bed and breakfast establishments in Fulton County is Heritage Meadows Farm Bed & Breakfast. Judith Mihal, one of the proprietors of the two-room, working farmhouse in the town of Ephratah, is another business person crying foul over the county's proposed occupancy tax.
"It's different for us," Mihal said.
She said in a hotel, the occupancy tax is just levied on the room. But with bed and breakfast establishments, she said, meals come with the rooms and there will be additional cost of 4 percent related to the meals. She said she's anticipating this set up because as a member of the Central New York Bed & Breakfast Association, she knows personally that inclusion of tax on meals with the rooms isn't separated out.
"In other counties, they haven't had a way to do this fairly," Mihal said. "It makes it so we're not competitive. It gives the hotels a better edge."
Michael Anich covers Johnstown and Fulton County news. He can be reached at johnstown@leaderherald.com