Hotel tax hike overcomes alliance of conservative, liberal delegates

Most lawmakers swayed by argument that money will benefit tourism and business

February 03, 2011|By Larry Carson, The Baltimore Sun

The old dictum that politics makes for strange bedfellows was rarely clearer than in the vote among Howard County's state delegates approving the Ulman administration's bill boosting local hotel room taxes from 5 percent to 7 percent.

Allied in opposition were the delegation's most liberal member, Democratic Del. Elizabeth Bobo, and Republicans Dels. Gail H. Bates and Warren E. Miller, the two most conservative. Their reasons for opposing the measure were different, but led them to the same position. Though the local bill affects just Howard County, to become law the measure must be approved by the General Assembly.

In the final vote, Bobo said she opposed any restrictions on the use of the new revenue because of heavy demands on nonprofit and county social agencies that need more money to help people in crisis.

"I have no problem raising the hotel tax," she said, but she does object to using the money for tourism in a time of economic crisis. "Human services are unable to keep up," Bobo added.

Miller has opposed the bill all along, and repeated that he felt keeping Howard's tax rate below Anne Arundel's 7 percent rate and even higher rates in Baltimore County and Baltimore City would help local hotels draw customers. In his business travels, he said, if a lower hotel rate is available a few miles farther away, he's told to take it.

"Pennies and dollars matter," he said. "I think it's folly to be raising taxes this year." Bates said she agreed that the tax should not go up. The other five Democratic delegates backed the bill as amended, as did two of the three county state senators, with Republican Allan H. Kittleman the lone opponent.

The original idea was to raise the hotel tax and split the proceeds three ways, with the local Tourism Council, the Economic Development Authority and the county treasury each getting one-third of the expected $1.2 million a year.

As amended before the vote, the bill would achieve essentially the same result via a different route. It now guarantees that two-thirds of the new annual revenue goes to tourism, and the rest goes to the EDA, though the county can withdraw existing funding allotted for the tourism agency. Both agencies have said they need more money to hire sales teams to boost corporate relocations to Howard and the tourism/hotel business. Local hotel owners and the Chamber of Commerce supported the bill.

That was enough to gain needed votes from moderate Democratic Dels. James Malone Jr. and Steven DeBoy Sr., who provided the 5-3 victory margin among the delegates.

The successful amendment, offered by Democratic Del. Guy Guzzone, a close ally of County Executive Ken Ulman, guarantees the new money's use by including it in the bill. "To me, it's simple logic," Guzzone said after the vote in Annapolis. "If you go two-thirds, one-third, the numbers end up right."

The delegation rejected several Republican attempts to change the bill. In one amendment offered by Bates, the new revenue could not be used to replace existing money the Tourism Council gets from the county. That failed on a strictly partisan vote, with only the delegation's three Republicans supporting it. Another offering from Kittleman would have killed the bill, replacing it with a requirement that the county give one-third of the current revenue from the hotel tax to tourism.

"I agree with the desire to increase tourism, but I don't agree with increasing taxes," he said. Kittleman's amendment failed on a partisan vote division.

State Sen. Edward J. Kasemeyer, a Democrat who heads the Senate's Budget and Tax Committee, supported the bill.

"To me it's an investment in this economy," he said. "Health care and tourism are the growing segments of the economy."

Guzzone pointed out that the business community wants the tax increase. "We're doing it for them," he said.

Del. Shane Pendergrass, a Democrat, questioned subsidizing businesses that don't offer health insurance to some workers, but seemed satisfied that the administration would work toward helping uninsured hotel workers apply to the Healthy Howard program.

Rachelina Bonacci, executive director of the Tourism Council, said Pendergrass has been trying to get more money to expand the county's tourism operations for seven years.

"I have to pinch myself," she said, to convince herself the bill passed. The effect would virtually double the council's county contribution. "Financially, we'll be positioned to truly compete."

She added that the bill would provide the council the security and predictability to allow long-term planning.

The delegation also approved a request for $450,000 in a state bond bill to help pay for renovations to the old stone post office building on Ellicott City's Main Street for use by an expanded tourism office, and put off a final vote on a bill to help the Ellicott City Veterans of Foreign Wars post by allowing some form of gambling.

Miller, the sponsor, gave up the idea of allowing up to five slot machines in the post in favor of a proposal by Malone, who said Howard could follow Baltimore County's example by allowing regulated casino nights once a month in lieu of slot machines. Malone said he is pushing a bill in the Baltimore County delegation to allow cash prizes, rather than products like television sets, to draw more people. A final vote was postponed until this coming week.

larry.carson@baltsun.com

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