Fall Lake residents sound off on proposed county lodging tax
Residents from Fall Lake Township made their position on the proposed countywide lodging tax clear at the Lake County Board of Commissioners meeting on Tuesday, April 9, in Two Harbors.
Carey Davis, a Fall Lake resident, lodging business owner and chair of the Ely Area Tourism Bureau, visited with a small delegation to pose concerns with the board's recent decision to explore the implementation of a countywide 4 percent lodging tax.
The proposed 4 percent tax would be dedicated in two ways: 3 percent would go to funding countywide marketing campaigns, while 1 percent would go back directly to the communities to fund festivals and events.
Davis took issue with the proposed tax as Fall Lake and Stony River townships already collect a 3 percent lodging tax, which is then rolled into the Ely Area Tourism Bureau. These townships have had a lodging tax for about 30 years.
"We didn't start this last week or even five years ago. We've been doing this for over 30 years," Davis said. "We know what we're doing. We've gone from a few ads in newspapers to extensive digital and social marketing. We've been doing this ourselves for a long time now and I think we're doing a pretty damn good job of it."
Altogether, the Ely Area Tourism Bureau collects about $300,000 in lodging tax revenue — Fall Lake businesses account for one-third of that budget with about $101,000. These funds are collected by the Cook County Auditor's Office, which also collects a 2 percent administration fee, and then issues payment to the joint powers lodging tax board under the bureau.
These funds are used to develop various marketing campaigns to promote the general Ely area.
"The biggest point we wanted to make is that 3 percent we contribute from Fall Lake and Stony River, if it would get pulled from our effort that we're currently doing, it would severely handicap our current marketing program," Davis said. "We want to make sure that 3 percent continues to come back to us and will continue under our system. We know what we're doing with it. As great as the North Shore is, we're not the North Shore. We'd hate to lose our marketing momentum and then wait maybe five to 10 years for maybe your efforts here to catch up."
County board members asked several questions about how the current tax system works before expressing gratitude with the members for visiting and expressing their concerns.
"It sounds like we're all talking about the same thing; how do we get more people here to spend more of their money to help our communities in Lake County," Commissioner Rick Goutermont said. "I think we're on track here and can work together since our vision is the same. This is about helping the whole county as a whole. You guys have a system that's working for you. We're not looking to take your money away and spend it somewhere else. Keep your system going."
Eva Sebastian, a representative from the Ely Chamber of Commerce, asked if the board would pass a resolution "that recognizes the existing joint venture agreement and clarifies that Lake County will not extract lodging dollars, whether 3 or 4 percent, from the Ely area joint venture."
Commissioners Rich Sve and Goutermont backed away from the resolution suggestion.
"I think it would be a knee-jerk reaction for us to do a resolution today as we're still in the beginning stages of our discussion of how this is even going to look," Goutermont said. "The last thing I want to do is, whether it be good or bad, put up a block that we have to work around because we passed this resolution. I think it should be open for discussion."
Discussions on the proposed lodging tax are expected to continue as a special committee explores the issue further. The committee consists of advisers from each of the communities as well as a couple of commissioners and the county administrator and auditor.
The committee will bring back a recommendation on the tax to the whole board at a later date.