Anne Arundel County Executive John R. Leopold's proposal to raise the hotel tax to generate revenue for the financially strapped school system has drawn sharp opposition from state and local tourism officials, who say it would have a devastating trickle-down effect on the county's economy.
The measure - which combined with Maryland's 6 percent sales tax would give the county the state's highest checkout fee and one of the steepest in the country - will drive visitors to competing destinations, officials predicted, saying they've seen it happen elsewhere in Maryland.
"People will be laid off, they will lose jobs, shops will close, and hotels will go bankrupt - the mid-size hotels that can't survive this - if we have a decline in visitors coming here," said Connie Del Signore, president and CEO of the Annapolis and Anne Arundel County Conference and Visitors Bureau.
Leopold said the measure, which would raise the hotel tax from 7 percent to 10 percent, is necessary to raise much-needed funds for schools, and his officials say the projected damage to the tourism industry is being exaggerated.
"I am making as many efforts as I can, using all the many arrows in the quiver, to help out the school system," said Leopold, a Republican whose budget proposal came in $51 million short of the school board's request, but still represents a 5 percent increase over this year. "Because of the well-established aversion to any increase in property and income taxes here, it requires me to secure revenue for our public school system through other means."
The tax increase is expected to generate $6.3 million a year and is the largest source of new revenue in Leopold's $1.2 billion operating budget. The council is scheduled to vote on it and the $214 million capital budget May 29.
Anne Arundel County, home to Baltimore-Washington International Thurgood Marshall Airport, historic Annapolis, the Naval Academy and Arundel Mills mall - the state's busiest attraction with 14 million annual visitors - brings in more tourism dollars than any other Maryland county.
Tourists spent $2.8 billion in Anne Arundel County in 2006, and the industry accounted for 24,000 jobs, according to the Maryland Office of Tourism Development. Baltimore City was a distant second with $1.4 billion in revenues and 16,000 jobs.
Six new hotels with 1,052 rooms sprung up in the county during the past year, a supply increase of 12.3 percent, said Larry J. Beiderman, general manager of the Loews Annapolis Hotel.
