Room for a room tax compromise

March 01, 1995

A tax on hotel rooms in Harford County seems to make eminent sense on the surface: more money for local tourism development, compensation to communities for providing extra services to hotels, an easy source of revenue from out-of-towners.

Then, too, there's the familiar argument that all the other counties, plus the state of Maryland, are already doing it.

But there's a downside, as well. Neighboring Delaware hotels (with a mere 1 percent tax) might grab off the overnight visitor business if Harford's room prices are raised too much by a higher tax. That possibility concerns Harford hostelries because more than half their customers are federal employees and contractors visiting Aberdeen Proving Ground who must cover lodging expenses on a fixed per diem travel allowance.

The reality is that government visitors to the Army facility are unlikely to drive an extra 50 miles round-trip to Delaware, and pay bridge tolls, in order to avoid a tax of a few dollars in Harford. What Harford hoteliers really fear is that they will have to compete more aggressively with each other in absorbing any local room tax in order to get the government traveler's business.

On the other hand, arguments of Aberdeen officials that they have been subsidizing hotels with millions of dollars in earmarked improvements are also suspect. City improvements benefit a lot of businesses, without requiring them to repay the benefits through specific taxes. Firefighting capability is one of the basic responsibilities of a community, not a special-interest item, Mayor Charles Boutin's views to the contrary.

This year's county hotel tax bill stems from futile efforts of Aberdeen to get a local room tax authorized by the General Assembly over the years. Sen. David Craig of southern Harford proposes a maximum 5 percent room tax in the entire county, although most of the revenue would still go to Aberdeen, where the major hotels are located. This would be in addition to the 5 percent room tax imposed by Maryland. And Harford government would still have to vote to enact the county tax.

The county's hotel association says it would support a compromise of a maximum 3 percent tax, with all funds going to the county, since other Maryland counties already have a local room tax. That won't find favor in Aberdeen government but it appears to be the proper solution, especially as Harford looks to new revenue sources to re-energize its tourism promotion program.

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