Campbell supervisors vote to advertise public hearing on raising transient-occupancy tax to 5%; parks funding debated

The Board of Supervisors voted to advertise a public hearing to consider increasing the county's transient-occupancy tax (lodging tax) from the current 2% to as much as 5% — a step county staff said would not require the funds to be restricted to tourism and could instead go to the general fund.

County Administrator Cliff Rogers told the board that a review of state code and county practice showed Campbell County is authorized under state law to levy the tax at up to 5% and that those proceeds can be used as general revenue rather than being restricted to tourism. "The FY 'twenty 6 budget projects $400,000 in the county revenues from the transient occupancy tax," Rogers said, citing the county's revenue estimate and noting growth in local hotel capacity.

Supervisor Matt Klein moved to advertise a public hearing to consider raising the tax up to the 5% maximum and to conduct the required code-language public hearing concurrently. Klein and other supervisors framed the proposal as a way to raise outside revenue — taxes borne by hotel guests and visitors rather than primarily by local property taxpayers — and several board members suggested assigning some of the revenue to capital funding for parks and recreation. "Is it technically a tax increase? Yes. But is it a tax increase on the people who live in Campbell County? No," Klein said in explaining his motion.

Board members asked for more detail on enforcement and collection, particularly for short-term rentals such as Airbnb. Administrator Rogers said enforcement is handled by the commissioner of the revenue and that compliance varies by provider: "Candidly, not well. The Airbnb enforcement is the purview of the Commissioner of Revenue's office," he said, urging that any public hearing include a staff report on collection and enforcement.

The board voted to advertise the public hearing; supervisors and staff said the hearing would allow the public to weigh in before any final decision. Several supervisors expressed willingness to consider dedicating a portion of any new revenue to parks and recreation capital needs, and staff agreed to include enforcement and projected revenue modeling in the public hearing materials.

Ending: The decision to advertise a public hearing does not change the tax rate; it starts a formal public process. Staff will prepare materials on enforcement, the revenue impact of one- to three-percentage-point rate changes and options for dedicating new revenue to parks capital projects.