Lazaro Aleman
ECB Publishing, Inc.
County officials have scheduled a hearing on Thursday evening, June 15, to get public input on a proposed increase of the tourist development tax, commonly called the bed tax, from the current three percent to five percent.
Katrina Richardson, executive director of the Tourist Development Council (TDC), is seeking the two-cent increase on behalf of her board, which voted to recommend the action.
The bed tax is one that visitors pay daily for short-term lodging in the county, whether in a hotel, motel, bed and breakfast inn, campground or RV park.
The mission of the TDC, which was established in 2003 by a commission vote, is to increase overall visitations to the county and lodging facilities’ occupancies. In 2006, the commission imposed a two-percent bed tax effective in 2007, which generated about $31,000 annually. And in 2017, it increased the bed tax to the current three percent.
As Richardson told the board on Thursday, June 1, the county is now eligible to levy an additional 4th and 5th penny to be spent on tourism promotion and development. She said the anticipated revenue from the tax increase would be $300,000 over a two-year period.
Richardson provided figures showing that in 2020, when the county’s population was around 14,500, the three-percent bed tax had generated almost $51,000, before being dramatically impacted by the pandemic and the consequent drop in visitations in 2021.
In 2022, however, revenues had rebounded, generating $91,000, she said. And so far in the first eight months of the current 2022-23 fiscal year, the tax had already generated $60,000, she said.
Richardson cited statistics from Visit Florida showing the overall economic impact of tourism to the county to be $8.3 million in ground transportation, $7.5 million in lodging, $6 million in food and beverages, $2.3 million in shopping and $1.7 million on entertainment and recreation.
Visitor spending, she said, supported 6.2 percent of the total jobs in the region, and it generated $2.2 million in state and local taxes and $1.7 million in federal taxes.
Moreover, she said, in the last 10 years, the TDC had collectively given away $125,000 in $1,500 grants to local organizations such as the Dirty Pecan, Monticello Opera House and Jefferson Arts to advertise their events outside the county and attract visitors.
“We feel that that $125,000 over the last 10 years has been beneficial to Jefferson County,” Richardson said.
Per her presentation, a lodging facility that today charges $125 for an overnight stay pays $3.75 for the bed tax at three percent.
“If we were to jump it to five percent, the tax would be $6.25, for a difference of a $2.50 increase,” she said. “And the $45 for some of the campgrounds, it’s a bed tax of $1.35 added to that. At five percent, the increase would move it to $2.25, which is a difference of $0.90.”
The money raised from the tax, she said, would be used to hire a company to develop a marketing plan as well as to continue promoting the county via traditional and electronic media to attract visitors, with 70 percent of the money earmarked for tourism development and promotion, 25 percent for other permissible uses on the first three pennies, and 10 percent for administrative costs.
“I think it’s badly needed,” Richardson said of the increase, “because if we slow down and let the surrounding counties beat us to the punch with the different advertisements, then we’re just going to sink. So why wouldn’t we want to stay up with them and promote Jefferson County so that it can be more of a destination.”
The proposal, however, has already received pushback from at least one commissioner and a member of the hospitality industry; or at least it did when it was first introduced to the board on Friday, May 26.
Commissioner J. T. Surles immediately came out in opposition to the proposed increase, suggesting that the proposal be scratched from consideration absent a hearing in the interest of sparing the taxpayers the advertisement cost.
“This is something that sets us apart,” Surles said of the current three percent. “Anybody who is business minded would see that we don’t want to be equal to, or the same, as Tallahassee and the surrounding areas. We have a reason for visitors to pull in here and sleep at one of our places, because we are a little bit cheaper. And in return, they are going to buy fuel and shop with us because, hey, they can get a little better deal on their room rate by staying in Jefferson County.”
Richardson’s counter was that the increase didn’t amount to anything significant, and that nothing was predetermined if the board proceeded with the public hearing.
“If we move forward now with the advertisement, it’s not set in stone that we will get the 4th and 5th cent increase,” she said. “It’s simply advertising the increase as we are required to do by law. At the hearing on June15 you guys can say yay or nay. So, to move it forward now is not passing it; it’s advertising it for discussion.”
She further underscored that the tax applied only to visitors, not county residents.
“Usually, none of us stay at our county’s hotels,” Richardson said.
Another who disagreed with the proposed increase was Pat Inmon, owner and operator of the 1872 Denham Inn.
Identifying herself as a former member of both the TDC and Chamber of Commerce, as well of the Florida Bed and Breakfast Association, Inmon said that raising the two-percent bed tax would put a hardship on the local lodging industry, which was already paying a 10-percent tax.
She noted that travelers on the interstate looking for a place to stay overnight typically googled facilities ahead to see the availability and rates of rooms, and they didn’t want to spend more than $100 nightly.
“It’s a psychological point,” she said of the $100 threshold.
Inmon gave a quick scenario of how the two-percent tax increase would affect business.
“Say the Super Eight in Monticello charges $89.95 per night, give or take,” Inmon said. “Future guests always want to know what the final bill will be for all charges. I hear that every day. At a 10-percent tax, the final bill is $98.95; at 12 percent, the bill is $100.75 or $1.80 higher. So, the hotel would have to lower the base price of the room $1.80 to get the rate below $100. And if they’re backing up their prices, I’m having to back up mine. This is the key point; we take the hit, not the person driving down the road.”
Another fallacy, Inmon said, was that most lodging quests who came to Monticello were from outside. Most in fact came locally to attend weddings, reunions and to visit families, she said. And many were retirees on fixed incomes.
“Right now, to have a repeat business is a big deal,” she said. “Booking companies track it. They keep track of all we’re doing and it’s a business model.”
She urged the commission to follow the Republican motto of not doing harm to small businesses.
“Don’t raise the tax,” she said. “They want to push this bed tax through right now, so it won’t have to go to a public referendum, because the voters of Jefferson County will not approve more taxes. And that’s why they’re trying to push this through.”
Notwithstanding the opposition of Surles and Inmon, the other commissioners indicated that the issue deserved a public discussion at minimum.
Meanwhile, County Attorney Heather Encinosa underscored that regardless the commission’s decision on the proposed bed tax increase, the tourist development plan would still require updating and revision to keep it current and compliant with state law.