Supervisors reject proposed lodging tax
by Larry S. Chowning
The Middlesex County Board of Supervisors appeared to be caught off guard at a meeting on August 17 when the Historic Courtroom in Saluda was filled with citizens, county businessmen and even a few attorneys.
When board chairman Jack Miller realized the large crowd was not there to discuss recent changes by MetroCast Cable, which was also on that night’s agenda, he asked board member Fred Crittenden, “What are all these people doing here?”
The answer soon became obvious. The group was there to oppose a proposed ordinance for a 2% lodging tax on those who stay at county motels and bed and breakfasts, and on transient campers at local campgrounds.
When the audience was asked who opposed the proposed lodging tax, almost everyone in the courtroom raised their hands.
The opposition voices in the crowd were loud enough that the proposed lodging tax was quickly defeated by a unanimous vote of the supervisors.
The main argument against the proposal was that the new tax would negatively impact businesses that support county tourism—the main economic force in the county—while only generating $20,000 in annual revenue.
During the public hearing on the proposed ordinance, Katie Hellebush, director of government relations for the Virginia Hospitality and Travel Association, said to levy a tax on transient lodging simply does not make economic sense.
She indicated that a 2% increase in the cost of lodging to people visiting here may cause them to spend less money while here and could result, over time, in the loss of visitors and jobs.
“With the economy the way it is, it could result in lost jobs and revenues, and it’s not enough of a tax revenue gain to take that chance,” said Hellebush.
Bob Calves of Urbanna favored the lodging tax. He said Middlesex real estate taxpayers are carrying a huge (tax) burden. “I don’t think people will go away because of a 2% tax.”
In June, Pinetop District supervisor Carlton Revere had voiced concerns that a lodging tax might have a negative impact on campground businesses. At the August 17 public hearing on the tax, Revere said a lodging tax was not as fair as real estate and personal property taxes, which are paid by a larger percentage of people.
Jamaica District supervisor Wayne Jessie said he did not want to do anything to hurt county businesses, and he and the other four supervisors agreed the proposed lodging tax would definitely hurt county lodging businesses.
Then, some board members appeared to realize their own arguments against a lodging tax mirrored the same arguments used by opponents two times before to defeat a proposed 4% county meals tax—a new tax the supervisors support and which will again appear as a referendum on the November 2 ballot in Middlesex County.
A meals tax can only be approved by voter referendum while a lodging tax can become law by a simple vote of the board of supervisors.
Supervisors previously placed a meals tax referendum on the ballot in 1999 and 2005, and county citizens voted it down both times, generally using the same arguments voiced by supervisors in opposing a lodging tax.
Crittenden and Revere both asked county citizens to support the meals tax referendum on November 2. The proposed 4% meals tax is estimated to bring in $190,000, considerably more than the $20,000 the 2% lodging tax would have generated.
Crittenden said, “I know people who said they would never eat in the Town of Urbanna again when the town passed a meals tax, but all of us are still eating over there.”
Crittenden also noted that almost every county now has a meals tax. “People expect to pay a meals tax,” he said.
Supervisors approved a 23% real estate tax increase earlier this year, the highest in the history of the county, and in June raised permit fees in almost all areas of county government.
Board members indicated they are attempting to find ways to soften the tax load on county real estate taxpayers, and they are hopeful voters will approve the meals tax to ease this load.
