County lodging tax legislation a no go unless comissoners ask
State Sen. Rod Skoe (DFL-Clearbrook) joined in when Hubbard County commissioners reviewed lodging tax legislation Wednesday.
On Dec. 11, Katie Magozzi, executive director of the Park Rapids Lakes Area Chamber of Commerce asked commissioners to recognize legislation that will expire when the 2007 session convenes Jan. 3.
Magozzi had obtained an opinion from the Secretary of State's office that if commissioners recognized the legislation before Jan. 3, the special law could be implemented at any time within the next 18 months.
If approved, lodging facilities would collect a 3 percent tax on visitors to be used for promoting the area. Of the total collected, the county would be allowed to keep 5 percent for administration costs.
Although the law did not require it, Magozzi said it was her intent to gain a majority vote of support from existing lodging owners before asking the county to collect it.
At their last meeting, commissioners decided to ask county attorney and commissioner-elect Greg Larson to review the legislation before taking any action.
This week, Larson said, in his opinion, approval means the county has conducted the public hearings and passed a resolution approving the lodging tax.
"The way I read it if we approve it, we're going to impose it," Larson said, adding even if the board wanted to proceed, there is not enough time to give public notice and hold a public hearing.
Skoe agreed the legislation was written similar to what's required for a local sales tax and the bill does require a public hearing and notice to give people time to respond.
"I think Greg's analysis is accurate," Skoe said.
Looking forward, he said, assuming the Chamber wants to pursue the tax and knowing the county will have two new board members after Jan. 1, he would ask commissioners for a resolution of support before he would introduce the bill again.
Commissioner Lyle Robinson said it would make more sense to bring more than 51 percent of the resorters' signatures. Robinson said after the Dec. 11 board meeting he had nine resorters tell him "absolutely not" and "zero who were for it."
Skoe added that because it had appeared there was some support for a lodging tax, he had had an opportunity in 2005 to get the bill passed "so I did it."
Like special legislation allowing a local sales tax, Skoe explained, "Some years you won't get any. Some you will."
He advised if the board wants him to proceed with another bill in the 2007 session, he would need to have the request made by the end of March or in early April.
He could draft the bill in the Senate and the board could ask state Rep. Brita Sailer to handle it in the House, Skoe said.
"The lodging people may not understand. Talking to me, they said the county shouldn't stick their nose in it," said commissioner Cal Johannsen. "They don't know a lot about it, but they're against it." Johannsen said eight resorters called him and, like those who called Robinson, they were all against it.
Board chairman Floyd Frank, who owns a resort, said what the others may not understand is they are competing against other communities, like Grand Rapids, which does have a lodging tax and so has a lot more money to spend.
"The lodging folks need to be educated," Frank said, adding at the same time they may not be able to simply add the 3 percent tax to their rates either, since other expenses affect rates and resort owners can't necessarily cover cost increases all at once.
Last time commissioner Dick Devine's only comment was that when he's a tourist, he doesn't like to pay the tax. This week, commissioner Swede Nelson said the same thing. "I don't like to pay it," he said.
Magozzi said she had suggested resort owners should be surveyed to learn about their concerns and then "it would take a lot of education," she agreed.
"You just need to let me know," Skoe said.
As long as the senator was at the board meeting, commissioners did some lobbying of their own.
Robinson said he hopes the legislature can do something about the raise in property taxes. "It just ain't fair," Robinson said.
Skoe concurred. "When you look at your property tax statement, the school's used to be the largest portion and now the county is," he said.
The senator, who has been chosen to chair the Property Tax Division, said the Senate will examine the county aid formula. He said it could help rural counties, for example, if the money allocated for crime took the number of cases involving methamphetamine into account.
The Senate also will look at some money for program aid, the homestead and ag credit and other changes to lower property taxes.
"I think people are pretty upset. The counties are in a tough role. You have to provide mandated services, but there hasn't been a lot of attention to county aids. There is talk about local government aid, but that is city aid. County aid is on our list of things to do," Skoe said.
Frank asked if Skoe expected the legislature to set levy limits, a restriction the governor talked about during the election.
Skoe said he doesn't believe levy limits are likely to come out of the session.