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Lawmakers debate redirecting lodging-tax revenue to local roads and infrastructure
Summary
A sponsor proposed reallocating part of the state lodging facility tax to county and municipal infrastructure; the House Taxation Committee rejected the plan after business and tourism groups warned of damage to local tourism marketing and visitor services.
A proposal to divert sizable portions of state lodging tax collections to county and municipal roads and infrastructure failed in the House Taxation Committee after witnesses warned it would cripple statewide tourism promotion and local visitor bureaus.
Representative Scott Rosenzweig, sponsor of House Bill 914, said the growth in lodging revenues has outpaced other government revenue streams and that some of those dollars should ease infrastructure costs borne by counties and towns. “Counties and towns have been asking for help for a long time,” Rosenzweig said during his opening remarks.
Nut graf: The bill would have redirected a chunk of the portion of the lodging facility tax currently routed through the Department of Commerce for statewide marketing and region-level tourism work, and instead allocated funding to counties and municipalities for roads, emergency services and visitor infrastructure. Tourism industry leaders and the department warned the change would devastate local destination marketing organizations and shrink statewide promotion.
Opponents included the Department of Commerce’s acting director, Mandy Rambo, who said cutting the department’s budget would force it to end trade offices abroad, reduce rural-tourism grants and curtail statewide marketing. “This would result in a closure of the Statewide Tourism Office,” Rambo said. Hotel owners, tourism associations and local chambers of commerce testified that CVBs and chambers rely on those allocations to manage visitor centers, events and local promotion.
Committee action: The committee voted 3–18 against the bill in committee. Supporters argued the accommodation tax inflows had grown rapidly and that localities need an equitable mechanism to pay for visitor impacts and matching infrastructure grants; opponents said redirecting the funds would reduce visitation and the taxes that visitors themselves contribute to state and local budgets.
Ending: The bill was defeated in committee. Sponsors and county officials said they will continue to seek funding mechanisms for local infrastructure; tourism and business groups said they will press to preserve current tourism funding structures.
