Hoteliers get reprieve from room-tax rise Schmoke to wait one week, allowing other plans to be offered

April 03, 1996|By Gary Gately | Gary Gately,SUN STAFF

Amid a storm of protest from hoteliers, Mayor Kurt L. Schmoke has decided to give them a week to come up with alternatives to raising the city's hotel tax to finance the city's share of the $150 million Baltimore Convention Center expansion.

Mr. Schmoke said last week that he had planned to seek approval today from the mayor-controlled Board of Estimates to increase the tax from 7 percent to 9.9 percent.

Including the 5 percent state sales tax, the move would raise Baltimore's nightly hotel tariff to 14.9 percent, the highest rate on the East Coast.

But after the mayor's top budget officials met privately with five downtown hoteliers Monday, Mr. Schmoke agreed to wait a week, said his press secretary, Clinton R. Coleman.

"The hoteliers said they thought they could come up with an alternative to the higher tax, so the mayor decided to give them a chance," Mr. Coleman said.

But alternatives to the tax increase seemed elusive yesterday, leading some to suggest that the higher rate may well be inevitable.

"The meeting was pretty grim; they made clear to us what the position was," said Kent Bruggeman, general manger of the Holiday Inn Inner Harbor.

"I can tell you this [tax increase] would have a dramatic and devastating long-term impact," Mr. Bruggeman said, noting dismal bookings for 1999 conventions.

Like other hoteliers and business leaders, he argued that the tax increase would cost millions in lost potential spending and tax revenue, particularly in the highly competitive convention industry, where taxes often influence choices for sites.

The plan to increase the tax came as a result of a 1994 compromise in which Mr. Schmoke withdrew a proposed room tax increase but pushed legislation laying the groundwork for a future increase.

The 1994 city ordinance specifies that the tax would take effect unless additional hotel tax revenues cover the city's annual share of the expansion cost, estimated at $4.3 million for the budget year beginning July 1.

Pub Date: 4/03/96

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