At the January 28 meeting of the Lancaster County Convention Center Authority (LCCCA), NewsLanc asked what the impact will be from recent and future declines in hotel room tax revenue. Executive Director Kevin Molly, however, was reluctant to make any definite projections: “We really don’t have any idea, but if we have to provide our best information, we see a slight increase for next year,” Molly asserted, “The impact of that—too early to tell.”
“We’re watching it keenly,” Molloy noted, “Because, not only do we not want it to decrease any more, but there’s also a school of thought that, last summer—as you know we’re a Memorial Day to Labor Day environment—we had eight weekends that had rain. I don’t know the weather forecast for next summer, but if we have clearer days than we had, we should see some increase.”
When asked for the likelihood of the hotel room sales tax rate being raised, Molloy was doubtful. “I don’t think we’re in a position where we’ll have to look at [a tax] increase,” Molloy said.
The executive director explained that, under Ordinance No. 45, which establishes the tax, 20% of revenues are allocated to the Pennsylvania Dutch Convention and Visitors Bureau (PDCVB). But if the Convention Center Authority’s 80% becomes insufficient to keep up with debt service, the trustee could request that the PDCVB’s portion be diverted to the LCCCA.
Molloy added that, should the full proceeds of hotel room tax revenue remain insufficient, the County would be then responsible for convention center’s debt service. “And how the County would deal with it is their issue,” Molloy said.
Molloy stressed that he was simply detailing the “mechanisms in place,” and not at all suggesting the likelihood of such events occurring. “I don’t think we have a climate with the hoteliers or other folks in our community that we’d even want to go that route. So I don’t think that’s one of the things we’ll be looking at to do,” Molloy said.
All true. But the catch is, when the LCCCA is forced to claim the PDCVB’s portion of the “hotel tax”, it will starve the Visitors’ Bureau for funding in the wake of drastic State subsidy cuts. This is particularly serious because the PDCVB does a large portion of the marketing for the convention center, including three full-time employees.
The Lancaster County Commissioners will be told that they have no alternative other than increasing the “hotel tax” to the maximum amount allowed by State law (which I believe is 7%).
I suppose it’s too much to hope for that the folks who pushed this upon the taxpayers (LNP,Hish assoc., Gib Armstrong, etc) would step forward and make up the difference.