Council to consider hotel tax issue

When the Farmington City Council meets next week they will be asked to consider placing a hotel tax on the August ballot. If approved by the council, and then approved by voters in August, the tax could provide several hundred thousand dollars annually to be spent on promoting tourism.

The ballot issue would impose a tax on the rental of hotel, motel or other alike overnight accommodations in the Farmington city limits. As drafted, the council bill calls for a five percent tax — but that could be amended to three percent or any other number by the council.

Mayor Stuart “Mit” Landrum took the lead in discussing the possibility of the ballot issue when he and other city leaders met with a group of hotel managers and business people late last week. The purpose of the meeting was to gain input from the businesses affected by such a tax before moving forward with a decision to place the tax issue before voters.

Should the city decide to move forward with a hotel tax to be decided in August, the deadline to get the issue on the ballot would be May 26. Otherwise, the issue could be placed before voters in November.

“Tourism is one component of the city. There’s also medical, industrial, housing …,” Landrum said. He went on to name an assortment of components, then say that all fell under the city’s economic development plan.

The mayor explained how the city administration was considering asking voters to approve a five percent sales tax to be imposed only on the rental of overnight housing within the city limits. The tax would not affect any food sales or other services provided by hotel, motel or bed and breakfast operators.

Based on an estimate of 375 such rooms in Farmington and considering a 60 percent occupancy rate at about $60 per room per night, the tax would generate nearly $300,000 per year which could be used for tourism. One hotel manager at the meeting said the occupancy rate in her facility was much higher than 60 percent on average, and all agreed that the average room rate was higher than $60.

Steve Spitzmiller, representing the Summers Bay Resort and other holdings of Joe Scott Sr., said Mr. Scott had issued a statement to City Administrator Greg Beavers about his position on the proposed tax. “He’s against this,” Spitzmiller said, going on to explain that he could only reiterate Scott’s position set down in the letter.

When asked if Scott would consider agreeing to support a three percent tax, as opposed to five percent, Spitzmiller said he would discuss it with Scott later in the day. The mayor said he wished Mr. Scott could have made the informational meeting, and asked Spitzmiller to request a visit between Scott and city officials to discuss details surrounding promoting the region through tourism efforts.

Landrum has since met with Scott to discuss his concerns directly.

Spitzmiller said Scott had spent three-quarters of $1 million to promote tourism himself in recent years, and was not in favor of having to raise the cost of his rooms through the new tax.

Monika Koen, manager of Holiday Inn Express, said her boss was in favor of the room tax. She said the family owned 12 hotels in Missouri, Arkansas and Oklahoma, many of which have room taxes in place.

“Mike feels it’s a good thing,” Koen said of her employer. She did say the issue was raised of possibly imposing a three percent tax instead of five percent.

Landrum said the hotels and other room rental establishments were an important part of Farmington, adding that because of such nice facilities the city could host things such as larger regional and state sporting event and some regional conventions.

He went on to say the city intends to contribute some funding to the economic development coordinator’s efforts to enhance tourism, but that it would be the work of a professional marketing person to develop a marketing plan and see that it is properly implemented.

Landrum concluded the gathering by saying that Farmington needs to look at where the community wants to be 15 to 20 years down the road. “We could be the size of Cape Girardeau. We do have a story to tell. We just need to be able to tell it.”