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Village Vision News

Board discusses options for hotel/motel tax abatement

Tuesday, December 27, 2011

Reducing or eliminating Forsyth’s 3 percent hotel/motel taxes will be among the topics trustees tackle in January when budget discussions begin for FY 2012-2013.

Trustee Bob Rasho introduced the concept at a late November Board meeting and revisited the issue at a Dec. 5 meeting with comments from several other trustees. Trustee Eric Morr said he was “…in favor of a compromise” and would like to see a reduction in this tax structure. He later expanded this idea and suggested suspending the hotel/motel tax until the account reaches a reasonable level, and then bringing back the tax at a lower rate to balance income with spending.

Rasho said figures obtained from Village Treasurer Rhonda Stewart show that the Village has accumulated $345,000 in hotel/motel taxes, an amount he labeled as a “slush fund.” These tax monies are restricted in use and can only be spent to promote tourism.

Recent recipients of the tax monies include the Futures Charity Golf Classic, the Decatur Park District and the Rodney Miller Triathlon. Last year, the Macon County Fair, Decatur Children’s Museum and Macon County Crimestoppers were newcomer recipients of funds, joining veteran recipients Decatur Celebration, Lakeside Music & Arts Festival and the Decatur Area Convention & Visitors Bureau with requests for funding. A total of $95,500 was budgeted for division among these special interest groups.

Rasho said the Village collects an average of $175,000 a year from hotel/motel taxes and suggested that a government entity such as the Village should not be making decisions on how to spend these tax monies. He said hotel owners know better than government how to promote their businesses and how to spend their own monies.

Forsyth resident and developer Steve Horve, as owner of Homewood Suites in Forsyth, said Rasho had a good point, but he didn’t yet know how to fully react to his idea since he was hearing it for the first time at the Dec. 5 Village Board meeting. He noted that organizations such as the Decatur Area Convention & Visitors Bureau, headed by Jeff Hendricks, help fill up the hotels/motels and stimulate economic development when they book major sporting events and conventions. Yet Horve said greater competitiveness could be the result for Forsyth hotels if hotel/ motel taxes were eliminated.

Rasho said his idea to eliminate or reduce this tax was triggered during recent Board discussions on the increased tax levy. “Taxes should be collected for a purpose and a need,” Rasho said. He noted his support of the 2011 tax levy increase came from the belief that this tax diversifies the Village’s tax revenues, serves a distinct purpose and is “strategically good for the Village.” Further discussing the subject of tax revenue in general, he floated the idea that trustees should look at sales taxes. “If we don’t need it, we could reduce it,” he said and added that a tax holiday might be a viable option as well.

Mayor Hap Gilbert is in favor of keeping the 3 percent tax hotel/motel tax although he conceded that he would consider reducing it to 2 percent. “I don’t want to eliminate it [hotel/motel tax] … there are a lot of things we could do with the hotel/motel taxes,” he said.

Trustee Larry Reed was in agreement with the mayor and said signs, billboards and newspaper ads are options for tax money expenditures and should be tried before deciding to lower the tax rate.

The mayor later said the Decatur Area Convention & Visitors Bureau is working to compile a list of ways in which to better promote Forsyth. Among them is sponsorship of highway attraction signs featuring local attractions such as Hickory Point Mall, Forsyth Antique Mall and Coziahr Harley-Davidson Museum.

“I strenuously object to [the hotel/motel tax monies] being called a ‘slush fund’ because it is legitimate money being spent on legitimate projects,” the mayor said.

Rasho said thinking “outside the box” is essential and his suggestions on the hotel/motel taxes were meant to stimulate ideas prior to the startup of the budgeting process next month. He said he was encouraged to hear hotel owner Horve say that increased competitiveness could come from a reduction or elimination of Forsyth’s hotel/motel taxes.

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