Convention center annual projected losses up another million dollars

According to the 2009 year end “Statement of Income – Final” recently received by NewsLanc, the convention center “Net Revenue” for 2009 came to a loss of $677,742, one and a half times its “Total Revenue” of $451,195.

Of even greater significance, energy costs are projected to exceed the earlier budgets by over $300,000 a year, and it appears that there will be a shortfall from the convention center’s share of the hotel room  sales tax of close to $700,000. Therefore, there may be a shortage of close to a million dollars per year prospectively over what was originally projected

As previously reported, the revenue from the hotel room sales tax in 2009 trailed the previous year by $441,411, an 8% drop.

After only nine months of operations, the 2010 annual operating loss may be close to a million dollars in addition to the $400,000 budgeted to fund the convention center authority, assuming the revenue figures remain as projected. (That may prove to be a big assumption.)

The reserve fund can be tapped to cover losses for the initial years of operations, but upon depletion it would be necessary for the convention center to claim most, if not all, of the smaller portion of the hotel room sales tax that currently goes to the Pennsylvania Dutch Convention & Visitors Bureau.

The 5% tax is split into a 3.9% hotel tax on hotels and motels and a 1.1% excise tax on hotels, motels, bed & breakfasts, and tourist homes.  80% of the 3.9% hotel tax goes to the convention center and the remaining 20% goes to the Pennsylvania Dutch Convention & Visitors Bureau (CVB). The 1.1% excise tax goes in its entirety to the CVB. Therefore out of the 5% tax on hotels and motels, 3.12% goes to the convention center and .78% goes to the CVB. If certain conditions occur, the convention center will receive the 3.9% on hotels and motels in its entirety.