LET’S START BY STATING SOMETHING that’s obvious, and probably true… taxes generally don’t go down, they go up. Just like everything else goes up, taxes go up. Income taxes, property taxes, school taxes, and all the other taxes we pay, one way or the other, they all go up.
In fact, even the taxes that stay the same, go up. The 6% we pay at the store doesn’t change, but as the price of what we buy goes up, so does that 6%. (Follow me for more rudimentary knowledge of the way things work.)
And now there’s talk of another tax, a brand new one, which could be levied by local authorities. But this one comes with a catch… we won’t have to pay it! Nope. It’s a tourism tax. As in… thanks for coming, now pay up!
Another Tax!
Wait… I thought we already had a tourism tax. Isn’t there currently a fee that’s tacked on to hotel bills? Yup. It’s 6% (there’s that 6% again) and it goes to the local travel bureaus for marketing and promotion. The city gets squat. Just more tourists, taxing (there’s that word again) our city services and infrastructure.
So, is this really happening? Not yet, but local businessman Jeremy Johnson think’s it’s something worth considering. On a recent appearance on Public TV 13’s Media Meet, Johnson indicated he believes a tax on tourists, with that revenue going to the city, would help offset tourism’s downside.
“I think we need to focus on things like public amenities and critical infrastructure, whether that’s roads, utilities, and emergency services, to have a wholistic and sustainable community.”
Deliver What You Promise
Johnson supports promoting tourism… after all, he’s a co-owner of Marquette’s new Kona Hills Campground, but believes you need more than just a traditional marketing campaign to foster a legion of happy campers… so to speak.
“Funding public amenities like mountain biking trails or marina improvements IS marketing,” Johnson contends. “These things attract people and dollars to our community. In fact, a recent study with Eagle Mine estimated the NTN trails brings in over $42 million dollars per year in economic impact to Marquette County. Why wouldn’t you want to fund similar projects with that kind of return on investment?”
And though campgrounds are not subject to the current tourist tax, Johnson isn’t against the idea of them, along with short term rentals, being included in a new assessment.
“I think every type of short term stay should be included in tourism and lodging taxes,” Johnson told me. “That includes campgrounds, RV parks, Airbnb’s, cabins, etc. The way people are traveling is changing and in the case of Marquette county, over 50% of our lodging revenue comes from outside of traditional hotels and motels already. More than $40 million per year is spent on lodging that is not hotels or motels in Marquette county.”
How Much is Too Much?
How much an additional tourist tax would amount to is negotiable. That is, if you could get it approved. It would likely face opposition from hoteliers, who are already fighting a perception of high prices.
Would it hurt our booming tourism industry? Another $10 tacked on a room rate, when vacancies can be hard to find, probably wouldn’t scare away someone bent on seeing what all the fuss is about.
Our municipal leaders are surely mindful of the revenue visitors bring to the city, as well as the bother some residents find by their presence. At Tuesday’s regular meeting, the Marquette City Commission approved a $60,000 contract with a consulting firm charged with the task of helping the community best deal with an influx of visitors.
Just thinking out loud here… if we had a tourism tax, maybe it could cover the $60,000 bill we’ll have to pay for being told what to do with our tourists. That’s some real synergy there.
A Hard Sell
Though a lot of hoops would have to be jumped through to make a tourism tax happen, Johnson thinks it would be worth the effort. “Tourism taxes can help reduce the pressure on local property taxes. Imagine if tourism taxes paid for all of our fire and police services. I’m literally advocating for lower taxes on residents when I say we should increase our tourism taxes and direct it to public amenities and critical infrastructure.”
Did you hear that? He said, “Tourism taxes can help reduce the pressure on local property taxes.” Does he have your attention yet?
Able Abatement
As long as we’re talking taxes, and what our leaders can do with regard to who pays what and when, a new hot-button issue came up at Tuesday’s regular City Commission meeting.
It seems Able Medical Devices, the firm with the new facility near the intersection of Division Street and M-553, is requesting what’s called an Industrial Facilities Tax Exemption from the City of Marquette. They were previously located at Sawyer, but moved into Marquette to be closer to the action. (My words.)
I’m a little out of my element here, but basically this means they want some tax relief, for up to 12 years, because they have made a considerable investment in our community.
Picking Winners
The gentleman representing Able at the meeting made some strong points as to why the abatement should be approved, including references to the number of well-paid jobs the new operation has created, as well as the opportunity for expansion, provided the economic conditions are favorable.
Though the request for such an action was first introduced more than a year ago, such things often get stuck on red tape and take longer than expected. So now they’re asking for tax relief on a building that’s already up and running, and presumably accruing taxation obligations as we speak. (Also my words… and big ones at that!)
Because all this tax talk is starting to hurt my brain, I’ll try to boil it down to the basic question facing our commissioners… Do we want to reward a business for investing in the community? Or do we want them to pay taxes, just like every other business that’s also made an investment in the community?
Time for Reflection
Since there’s more due diligence regarding the exemption to be done by city staff, the commissioners were able to delay a decision. And though some believe requests like this get rubber-stamped by city leaders easily influenced by powerful entities, I was heartened to hear a couple of our commissioners suggest that wouldn’t be the case. We’ll certainly be keeping an eye on this one.
Enough
If you’d like to know more about taxes and taxation, Google it. I’m all taxed out.