Editorial: Cap on promotional spending needs to go

04/09/2016 9:00 AM |

Nearly 25 years ago, Suffolk County imposed a tax of 0.75 percent on the owners of hotels and motels, with the proceeds earmarked to benefit a variety of organizations. That tax was later quadrupled to 3 percent and, more recently, an effort has been launched to collect the same tax from homeowners who rent out their properties on a short-term basis.

The organizations that benefit from the tax provide great value to the county as historic, cultural or artistic resources.

Last year, they collectively received over $1 million in grants from the county. Local beneficiaries include East End Arts, the Long Island Wine Council, East End Tourism Alliance and nearly 75 other groups in Suffolk.

The tax is divvied up several ways, with similar organizations receiving just a small slice of the pie: 6.5 percent. Each year, the Vanderbilt Museum — bequeathed to the county in 1944 — is awarded 10 percent of the tax alone. Roughly a quarter of tax revenue goes back into the county’s general fund.

But for some reason, the proportion of tax proceeds that are spent to promote Suffolk County to tourists — who in turn generate more tax revenue — is capped at 24 percent, with a maximum of $2 million. Hotel and motel owners are rightly upset about this.

For the first time since the tax took effect in 1992, the Long Island Visitors and Convention Bureau, which handles promotion on the county’s behalf, hit the $2 million cap in 2013. With Suffolk County tourism on the rise, it’s unlikely that its share of the hotel/motel tax proceeds will dip below the $2 million cap.

The tax was extended for two years at the end of 2015 and both East End legislators — knowing how unfair the cap is to hotel and motel owners — rightly voted against renewing it. For better or worse, the region’s economy is now largely driven by tourists seeking short stays, who essentially foot that tax bill.

The cap’s renewal makes the prospect getting it lifted anytime soon a long shot. But that shouldn’t stop East End legislators Al Krupski (D-Cutchogue) and Bridget Fleming (D-Noyac) from taking up the issue now to ensure it isn’t included when the tax comes up for renewal again in 2017.

Capping the amount of money spent to drive tourism to Suffolk County as a whole — not just the East End — clearly makes for an unlevel playing field. As if quadrupling the tax in 2010 weren’t enough, capping the amount spent to drive business their way is a further punch in the gut for hotel and motel owners who pay the tax.

The $2 million cap on promotional spending through the hotel/motel tax is unfair and offers yet another example of western Suffolk County benefiting at the expense of East End taxpayers. It’s up to this region’s representatives to get to work making the rest of the county recognize that inequity.

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