Economic development proposal surfaces: EDA eyes transient‑occupancy tax increase to fund tourism and small business loans

Don told supervisors that Lancaster County’s current 2% transient‑occupancy (lodging) tax generates about $75,000 in revenue and that the EDA is studying whether to recommend raising the rate to create predictable revenue for tourism and an EDA capital program.

"If you go above 2% to 5% the state code says that the between‑two‑and‑five percent has to be devoted to tourism," Don said, explaining the statutory constraint that accompanies increases in that range. He noted some neighboring localities levy higher rates — a town he cited at 8% — and that moving above 5% would allow the county greater discretion on spending beyond tourism requirements.

Don said the EDA’s goal would be to capitalize a small‑business loan program and to generate funds for projects such as the River Realm contribution. He said John and the EDA are preparing a more detailed presentation for the board and that the county would consider the issue at future meetings.

Board members asked for rough revenue estimates and potential uses. Don did not present a formal ordinance or recommended rate at the March 12 meeting; he framed the discussion as "planting the seed" and flagged a more developed proposal to come with supporting calculations and comparative data from neighboring jurisdictions.

Any change to the lodging tax would require board approval and, depending on the chosen rate, some portion of the increase would be restricted by state code to tourism uses.