Traverse City Record-Eagle


April 11, 2014

Forum: TC can't get bed tax, visitors centers can

By Barbara Budros

I am writing to comment on the March 29 Another View: “Local tax a local windfall” about Franklin County in New York state seeking state approval to impose a bed tax on hotels and motels in that county, and your Online Poll question asking readers whether such a tax is a good idea. It is stated in the article that other counties in New York that have such a tax “would be hard-pressed to find ways to close budget gaps if suddenly confronted with the loss of those revenues.”

The article and poll question suggest that Traverse City or Grand Traverse County or some other local taxing jurisdiction might consider imposing a local hotel and motel tax. Presumably, these tax dollars could help fund road improvements, public parks, and public services and cover other expenses where we struggle to find adequate funding today.

While recognizing your readers rejected the idea 63 percent to 34 percent, I wanted to explain that the idea is a moot point anyway because the state of Michigan does not allow such a “tax.” Traverse City, Grand Traverse County and other local taxing jurisdictions cannot impose a bed tax or hotel occupancy tax and then use the revenue it generates to augment the general fund for public benefit — improving roads, increasing the capacity of our municipal utility and waste water treatment plant, and other general infrastructure needs or by providing more public services such as an enhanced police presence.

Under Michigan law, Act No. 59 Public Acts of 1984, title: “Community Convention and Tourism Marketing Act,” only “non-profit convention and visitors bureaus can impose and collect up to a 5 percent assessment from hotels and motels” which must be spent on marketing programs “established by a bureau to develop, encourage, solicit, and promote convention business or tourism” and “includes any service, function, or activity, whether or not performed, sponsored, or advertised by a bureau, that intends to attract transient guests to the assessment district.”

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