The Lake County Board of Commissioners heard questions and concerns raised by resort and lodging owners about the proposed countywide lodging tax during a public hearing on Friday, March 6 at the Lake County Highway Facility. The board of commissioners chose to recess the hearing until March 24 and will likely vote on the ordinance then.
The ordinance to implement a countywide 4% lodging tax has been drafted and reviewed by the county attorney, lodging tax committee and is still being reviewed by the Minnesota Department of Revenue. A copy of the ordinance was available for hearing attendees.
County Administrator Matt Huddleston said there may be minor edits to the language in the ordinance before the hearing resumes on March 24, but the main overall intention will remain the same.
Funds from the proposed tax would be allocated in two ways: 3% would go to funding countywide marketing campaigns, while 1% would go directly to the communities to fund festivals and events.
An additional 1% would likely be added in Two Harbors, as the city currently has a lodging tax of 3% — 2% dedicated to marketing and 1% dedicated to supporting the Edna G. tugboat. Municipalities with taxes already in place such as Silver Bay, Two Harbors and Fall Lake Township would have time before implementation to rescind their individual taxes.
"We’ve been working with each entity because our intent is not to adopt a tax and duplicate their marketing tax," Huddleston said.
Resorts concerned about tax
New owner of the Superior Shores Resort Bryce Campbell said he was opposed to the tax.
"I can appreciate what everyone’s trying to do. I think you’ve got the best interest in hand, but what I fear is missing is the research and data," Campbell said. "What I don’t think people realize is that this 4% comes off our bottom line. Resort fees always have to be lowered because of these taxes and it's just as important as this tax. To have to reduce it is frustrating."
Campbell said he was in support of the 1% dedicated to events and festivals, but said 4% was too high to implement. The increase would push his resort's fees over the 20% threshold where "guests start to push back."
"Why should we have to pay for everyone else’s marketing? Why should we have to take this on?" Campbell asked.
County Board Chair Rich Sve said the board members struggle with weighing the burden the tax will put on resort owners with the potential benefits it could bring to Lake County.
"The point is to have destination marketing for the whole county. Because if this is implemented, we're all in this together," he said.
Adam Labat, manager of Cove Point and Grand Superior Lodges, argued that the tax shouldn't be focused solely on lodging facilities.
"I feel like if it wasn’t just the resorts and the lodging places that were getting singled out, it would be better," Labat said. "And all the local food places like Betty’s Pies and the Rustic Inn will see the benefit from this, as well. And our other biggest concern is if is there potential for wasted spending. If it's going to happen, we want to see that it's spent wisely."
Commissioner Rick Hogenson said the county board and Lake County Events and Visitors Bureau would monitor the tax's progress.
"That’s where we need to be able to adapt and change," Hogenson said. "The last step is always looking back to see if it worked. If it’s not, figure it out how to change it. We have projections that will help us see if we're seeing the growth we need to or not."
The board recessed the public hearing and will resume it during the regular county board action meeting at 2 p.m. on Tuesday, March 24.