The Berks County Commissioners recently agreed that they are unlikely to support expansion of the 5 percent hotel tax, which is currently applied to hotels located within a 15-mile radius of Reading.Commissioner Mark C. Scott said at the board's Sept. 9 meeting that the commissioners had been approached earlier this year about expanding the tax to all Berks County hotels in an effort to increase funding for the Greater Reading Convention & Visitors Bureau. Currently the tax raises approximately $1.5 million annually.
The hotel tax was initiated in 1997 as part of the county's effort to fund the newly built Sovereign Center and to provide limited funding to the visitors bureau. The 15-mile radius was agreed upon after it was determined that this was the area that would most benefit from events conducted at the center.
Scott and fellow commissioners Christian Y. Leinbach and Kevin S. Barnhardt, were asked to expand the tax to the entire county and then provide the visitors bureau with 100 percent of the revenue from the new taxes.
Expansion of the tax would raise an estimated $250-$300,000 for the bureau.
The Sovereign Center Authority at first supported expansion of the tax but was opposed to changing the revenue split. The current agreement gives the authority 80 percent of tax revenue, with the remaining 20 percent going to the visitors bureau.
It is not clear if the authority continues to support expansion of the tax.
Scott made his position clear from the outset and said he will not support the tax expansion. In speaking with local hotel operators, including the owner of the Bear Creek Hotel and Resort in Hereford, Scott said hotel owners and operators are very attuned to the current climate of business and corporate travel.
"Corporate bookings are down in the area of 20 percent from last year," said Scott "I don't believe that in this environment we should put yet another burden on any business in Berks including hotels. I am announcing my intention not to support expansion of the hotel tax."
Leinbach noted that while an expansion of the tax would provide more funding for the visitors bureau, currently suffering under state budget cuts, most of the hotels affected by the new tax would most likely fight the tax in court and prevail.
"Commissioner Scott is right on the money. There's been a lot of discussion about when you increase taxes and when you don't," Leinbach said. While describing taxes as a "necessary evil," Leinbach indicated he is still undecided, although definitely leaning against expansion.
Barnhardt said he, also, is mindful of the economic downturn and noted that county government is facing the downturn as well.
"I too, do not want to be a burden to local businesses," he said, adding, "tourism bureaus are going to be better served if they looked at this in a regional context."
Barnhardt said he does not want to see the tax expanded beyond the current 15-mile border.
While there is no deadline on this issue, the commissioners will most likely vote sometime before the end of the year.