Room Tax Bill Would Hurt Small Communities in WI

Cities, Town Keep Up to 30% of Room Tax With Change

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Room tax revenues in Wisconsin is currently split almost equally between city budgets and tourism funding. 

Room taxes are paid by people staying at lodging establishments like hotels and motels as part of their bill. 

But, a change being proposed by state lawmakers would drastically adjust the way room tax dollars are distributed. 

This change would mean cities and towns could only keep up to 30% of room tax money collected. 

The rest would go directly for tourism promotion and development. 

The community of Bayfield has been keeping 48% of room tax revenue and city leaders worry such a big cut would cause funding issues for services. 

“There aren’t many small towns that have 4 full time cops and 2 swimming beaches.  That’s how we pay for those things,” said the Mayor of Bayfield, Larry MacDonald.

But, if the city was unable to invest as much in services like these the chamber would plan to step in and help replace some of that money. 

“We will do whatever we can per legislation on using our share towards replacing some of that tourism development,” said Executive Director of the Bayfield Chamber, David Eades. 

With a population of around 500 people, the City of Bayfield needs revenue from visitors to keep their tourism economy growing. 

Co-owner of the Rittenhouse Inn, Mark Phillips, sees the tourists roll in first hand.

He’s confident the city and chamber would work together no matter what decisions are made about dividing room taxes.

“With that synergy we have, it will all work out in the end,” said Phillips. 

But, changes in room tax policy would mean other tough decisions. 

“We would have to raise our tax levy by 8% which we can’t do tax levy restraints from the legislature,” said MacDonald. 

Again, meaning potential cuts in city services. 

“We want to be able to provide what visitors have gotten used to and what we have. Without those services and that image, I don’t know what we are going to do,” said MacDonald. 

Opponents of a room tax change believe Bayfield could possibly lose $1 million in funding over 20 years if the tax money is divided in the way being proposed. 

But, supporters of the plan consider it a great way to better promote tourism statewide.

The budget will be decided by June 30th.

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