City Council discusses tax increase in workshop

The Guthrie City Council held a workshop regarding an increase for the hotel and motel tax rate Tuesday evening. The council heard from the Guthrie Chamber of Commerce and several citizens on a proposed increase rate of anywhere from one to four percent.

The council was presented with three questions: do they want to see the increase, at what rate and when to hold an election.

The City staff was proposing a hotel tax rate go from its current four percent to eight percent. Ultimaetely, the proposal would be voted by the people.

In May of 1982, the City of Guthrie Hotel Tax was approved by voters (302-168) to impose a two percent excise tax on gross receipts from rental of hotel and motel rooms with other sleeping accommodations such as bed and breakfast’s. In June 0f 1998, it was again increased to the current four percent with a 430 to 125 vote of the citizens, along with five percent of all taxes collected to go towards the City’s administrative costs.

The hotel and motel tax is split up between the promotion of tourism in the City of Guthrie and maintenance of the city parks. The Chamber and Convention Visitors Bureau (CVB) receives two-thirds of the tax and the other one-third towards the parks.

“We are finding more and more and more opportunities to impact the nation, state and world for Guthrie and that gets more expensive,” Lucy Swanson with the chamber said. “We are not going to be able to reach people and serve people that come in if we don’t have the funding to implement plans that we need to implement.”

Newly hired Cody Mosley, who is the Director of Economic Developing and Marketing for the City of Guthrie, reminded citizens that the tax increase would not affect residents, but visitors who would be visiting and staying in hotels, motels and bed and breakfasts.

In the audience of an estimated 20 people included, management of the Sleep Inn and Best Western hotels along Interstate 35, along with members of the Bed and Breakfast organization. All three oppose the idea of the tax hike, that currently stands at 12.5% with the suggestion of 16.5%

The current four percent tax on hotels and motels is added into the current sales tax of 8.5% (4.5% from the state, 3% from the City of Guthrie and 1% from Logan County).

“Not sure that is appropriate,” Bed and Breakfast Association President Gary Good said.

Good explained that the B&B industry has taken a dip and is currently struggling to stay alive.

Guthrie is known as the “B&B Capital of Oklahoma” despite the number of B&B’s decreasing from 16 to the present nine B&B’s.

Chamber and CVB Manager Mary Coffin, who also serves as a city councilwoman, said they have seen an increase of $26,000 to $30,000 in hotel and motel tax money this year compared to 2011. She was asked by council member Gaylord Z. Thomas, “if you’re making more money then why are you asking for more?”

Coffin responded, “so we can promote more things so that we can do more things. If we have more, we can do more.”

Swanson echoed the sentiments as Coffin.

“The more the CVB can do the more visitors will come to Guthrie, the more dollars for the retailers, the more tax revenue for the City and more improvements for Guthrie. It’s a win-win. It can’t be a bad thing.”

According to the 2013 Guthrie budget, the tax was budgeted to bring in $113,000 in both 2012 and 2013. The CVB would receive $75,000 and the parks would gather $38,300.

Several citizens were heard, including James Long, who talked about residents of Guthrie perhaps taking the burden for the city. He insisted on a program similar to the successful MAPS project in Oklahoma City with one example being a one cent tax increase.

Others were heard and proposed an “Entertainment Tax” of some kind that would help fund projects that are deemed as appropriate.

The workshop went on for an hour and 17 minutes before council concluded to conduct further workshops on the topic.

Compared to Other Cities

Coffin shared examples of other cities and how other CVB’s receive their money.

Broken Arrow receives four percent of their hotel and motel tax, but does not have to split the tax with any other organization, or group.

In Claremore, they receive 5% of the tax and keep 99% of the income.

Other cities, including Enid, Muskogee, Ponca City and Woodward have an 8% tax, but split that with other agencies and departments.

Parks would see Improvements as well

Mosley stated the added revenue would benefit the parks with equipment, along with ideas for walking and biking trails, skate board parks, improvements on what the city has now and possibly future developments.

Mosley pointed out Lake Liberty as one possible development.

Included in the 2013 budget, the Hotel/Motel Tax is $30,000 of fund balance for park improvements and $38,700 for Liberty Lake improvements.

Example of Increased Rate

The current hotel/motel tax (12.5%) on a $99.99 stay in Guthrie is $12.48. If the tax were to be increased to eight percent, the adjusted tax rate would be $16.49 for an increase of $4.01 per night.

The Sleep Inn hotel manager stressed to the council that he would like to add $500,000 worth of improvements to his business and increase his rates five to ten percent, but would be uncertain if he could do that with added costs going toward the customer.