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Monroe Council Votes to Seek 1% Occupancy Tax Increase; Will Ask State Delegation to Introduce Legislation
Summary
Council voted to ask the city's legislative delegation to seek authority to raise the local occupancy tax by 1 percentage point; staff said the increase would support the Science Center's operations and tourism promotion if authorized by the General Assembly.
Monroe — The Monroe City Council voted to direct staff to seek an adjustment to the city's occupancy tax by pursuing up to a 1 percentage-point increase and to lobby the local state legislative delegation to introduce necessary enabling legislation.
City staff explained the legal and fiscal framework for occupancy taxes and how Monroe currently uses proceeds. Lisa Hollowell told the council that the city's authority to levy an occupancy tax is governed by session law and that the city currently levies the full 5% permitted under its authorizing session law. Any change to allow the city to levy additional percentage points would require action by the General Assembly and local delegation sponsorship.
Hollowell said the occupancy tax applies to hotels, motels, inns and short-term rentals and that collections are remitted by the Department of Revenue. She provided historical use rules: in the first 10 years after implementation, the distribution was one-third promotion and two-thirds tourism-related expenditures; in the subsequent period (and currently) it is two-thirds for promotion of travel and tourism and one-third for capital expenditures.
On revenues and the Science Center, Hollowell said 2025 collections were projected at about $920,000 and that a 1% increase could push collections above $1 million in a projected 2026 scenario. She noted the Science Center receives operational support from occupancy-tax-derived funds (figures cited during discussion included $190,000–$220,000 attributed to operational support and approximately $250,000 for debt service). Hollowell also said the Science Center's total operations were "probably over $500,000" annually while bringing in about $300,000 in earned revenue.
Council discussion included support for pursuing the option to increase the tax, concerns about relying on a tax to resolve operational shortfalls at the Science Center and recognition that the Tourism Development Authority maintains a fund balance. One council member urged addressing the underlying operational deficit at the Science Center instead of increasing the tax; others argued the tax is primarily paid by visitors and could help stabilize tourism and capital needs.
A motion to pursue legislation to increase the occupancy tax by 1 percentage point and to lobby the state delegation passed by voice/hand vote.
