Aberdeen aims to initiate hotel tax

City needs revenue, council members say

permission must come from General Assembly

December 09, 2007|By Mary Gail Hare | Mary Gail Hare,Sun Reporter

Aberdeen officials say they will push state legislators for a local hotel tax, even though it appears that winning the delegation's support for the measure could be an uphill struggle.

With 900 hotel rooms in the city, the tax could be a strong revenue source and could lead to a reduction in the city's property tax rate and offset expenses related to the city's Ripken Stadium lease, said Councilman Ronald Kupferman.

"If we don't ask for it, we are beat before we even start," said Kupferman, a longtime advocate of a hotel tax.

Because taxing authority comes from the General Assembly, neither the county nor its three municipalities can enact a tax without the enabling legislation from the state.

The proposal, which county and town officials have considered several times in recent years, resurfaced during discussions at the recent quarterly Harford mayors meeting in Aberdeen.

Councilman Michael G. Hiob said he would prefer a countywide tax on hotels and motels, but would settle for one specific to Aberdeen, a city of 14,700 residents living along the Interstate 95 and U.S. 40 corridors. Hotels line the area's main thoroughfares and are typically patronized by travelers and government contractors doing business at Aberdeen Proving Ground and other government facilities in the area.

"A county version would be the best way to go," Hiob said. "The money could be put back into tourism. The county should get behind this, but we will work both paths. A city hotel tax might lower our real property tax [rate] by about 10 cents. I don't see a negative for anybody."

Del. Barry Glassman, chairman of the delegation, said Harford legislators historically have opposed a tax on hotel rooms. But each year, legislators give proponents the opportunity to make their case, he said.

"With $1.5 billion in new taxes raised through the recent special session, I suspect any proposal for another tax will be looked at warily," Glassman said.

Harford is the only Maryland county which does not levy a tax on hotels, officials said.

Legislators have argued that a hotel tax would adversely affect tourism. They also fear the added cost of a room might exceed the per diem reimbursement paid to government and corporate workers who use hotels in the area.

However, James C. Richardson, county director of economic development, said he is not aware of any evidence that the tax hurts tourism.

"As far as the day traveler goes, it's location, location," he said. "Harford's location close to Delaware and Pennsylvania makes it a good place for corporations to [book] rooms."

Carroll County, one of the last jurisdictions in Maryland to enact a hotel tax, saw revenues of $321,676 from a 5 percent tax on its 440 hotel and motel rooms in fiscal year 2007, the first full year the tax was in effect, officials said. Revenues are funding tourism events and promotions.

"Aberdeen stands to gain the most from this tax," Hiob said. "We have hundreds of rooms with hotels usually at 80 percent capacity. Even a small tax could make a huge difference and be a sustainable revenue stream."

The budget for Aberdeen's city government will fall about $320,000 short of revenues this year because of expenses resulting from its contract with Ripken Stadium, Kupferman said. A hotel tax could help offset that loss, he said.

"We have to get the state's approval," Kupferman said. "I am going to talk to everyone and lobby the delegation. Hopefully, I will get consensus."

Statewide, the tax ranges from 3 percent to 9 percent per room. Aberdeen officials said they would ask for a 3 percent tax, which could generate nearly $300,000 in revenues.

Glassman, who has been nominated to fill the vacancy created by the resignation of Sen. J. Robert Hooper, said he will assess whether the benefits outweigh the negatives.

"We don't want to put our hotel industry at a disadvantage or to have business guests pay rates above their per diems," he said.

mary.gail.hare@baltsun.com

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