Letter to the Editor: We are missing out

To the Editor:

November 7, Waukon residents will have the opportunity to vote on our local Hotel/Motel Tax. You might ask, “what is this?” The Hotel/Motel tax is a tax imposed on the gross receipts from the renting of sleeping rooms, apartments or sleeping quarters in any hotel, motel, inn, public lodging house, rooming house, tourist court, bed and breakfast or any place where sleeping accommodations are furnished to transient guests when staying for 31 consecutive days or less.

A City is the entity that can impose, by ordinance of the city council, a Hotel/Motel tax at a rate not to exceed 7%. This tax, when imposed by a City, shall apply only within the corporate boundaries of the city. Currently, the rate is 4% tax for these sleeping accommodations in our city, which, according to State of Iowa figures, is low. Out of 156 Iowa cities that have a Hotel/Motel tax, 135 have gone to that 7% level.

Waukon is now proposing 7%, and why wouldn’t we? We are losing out if we don’t increase to 7%. This tax doesn’t affect our local residents but rather is a tax charged to individuals who are visiting our town on a short-term basis, and the good news is that these taxes come back to the City as revenue.

And now you ask, “How can this money be used to benefit our town”? Per State Code, the City must spend at least 50% of the revenues for such things as acquisition of sites for, or constructing, improving, enlarging, equipping, repairing, operating, or maintaining of recreation, convention, cultural, or entertainment facilities including but not limited to memorial buildings, halls and monuments, civic center convention buildings, auditoriums, coliseums and parking areas or payment of principal and interest, when due, on bonds or other evidence of indebtedness issued by the City for these recreation, convention, cultural or entertainment facilities.

These revenues can also be used for the promotion and encouragement of tourist and convention business in the city. The remaining Hotel/Motel revenues may be spent by the City for any City operations authorized by law as a proper purpose for the expenditure within statutory limitations of City revenues derived from ad valorem taxes. Also, funds could be used for the payment of bonds which the City may have issued for the purpose of the above projects.

A short version of the understanding of this Hotel/Motel tax is that 50% of the tax revenues can be used by your city for tourism. Again, we are missing out by not utilizing the maximum rate allowable for that purpose.  I intend to continue requesting a portion of that money to use for economic development and tourism projects for our city.

I know that our current Hotel/Motel tax has been instrumental in helping out our Park and Recreation budget and subsidizing other budget shortfalls. So, why not take advantage of raising this tax to 7% and help ourselves even more.

Several local area towns that have imposed the 7% Hotel/Motel tax include Lansing, Cresco, Decorah, Elkader, Guttenberg, Marquette and McGregor. We are missing out if we don’t put ourselves on that list and utilize that money. Please consider supporting the raising of our Hotel/Motel tax to the 7% limit. If we don’t, we are definitely not taking full advantage of revenues that can benefit Waukon. You have nothing to lose but Waukon has everything to gain.

Ardie Kuhse
Director
Waukon Economic
Development