Macon County Chronicle

RBS Hotel Owners Fight Back

Less than charmed by the prospect of a 5% hotel/motel tax, the owners of Red Boiling Springs’ historic hotels – The Armour, The Donoho, and The Thomas House – intend to turn out in-force to oppose such a tax at the August meetings of the county court.

“We want the commissioners to know that we’re very unhappy about it,” said Evelyn Cole, owner/operator of The Thomas House, a family-run business.  “The commissioners I’ve talked to since the July 21 meeting didn’t know how we felt about it.”

Two of the RBS hotel owners said they had not been contacted by the Tourism Committee, and didn’t know that the issue was to be voted on at the last meeting of commissioners.

“I was asked that very morning [July 21] by Ms. Carolyn Whitaker [Chair of Tourism Committee] if I cared if the commissioners looked into a hotel tax,” said Ms. Cole, emphasizing the looked into. “We had no idea they were going to vote on it, or we would have been there,” she continued, accompanied by emphatic nods of agreement from sons David and Darrell.

According to David Cole, who takes care of the hotel’s paperwork and taxes, the 2% of the hotel tax that would be returned to his business won’t cover the cost of the additional paperwork.

“It’s just going to make more paperwork for us,” he said, “and to be honest, I think it will keep business away.”

The business lost, if it is, will go beyond the business lost by hotels. When people come to stay in the hotels they spend money and pay sales tax at other local businesses: restaurants when they’re hungry, gas stations for fuel and ice and snacks, mechanic shops and auto parts stores when they’re cars break down, retail stores for souvenirs or things they’ve forgotten to bring along or simply because they want to spend their extra money.

“What about that sales tax?” asked one concerned RBS citizen. “What about that 2.25% of the sales tax that the state sends back to us? They can’t send it back if we don’t collect it.”

People are price shopping these days, and virtually every person that calls the hotel for prices asks if that price includes tax, Ms. Cole revealed.

“How am I going to tell people that we charge almost 15% tax, when they can go drive 20 minutes to Kentucky, where the tax is only 6%?” she asked. “What’s the incentive for them to stay here, except the little things we do to attract them?”

The Thomas House regularly features plays or musical events each month to attract visitors. The Donoho Hotel also hosts musical events to draw tourists to the area.

“I’m highly in favor of supporting tourism in the county,” said Stroop on Monday, “but I am absolutely against the hotel/motel tax. We need to attract people to the county, but this isn’t the way to do it.”

“People aren’t traveling the way they used to,” said Cole. “We used to have a lot of church groups and family groups come in. But the economy is bad, gas prices are outrageous – I think people are frightened. Everybody is price-shopping.”

Asked the amount of revenue her business would have contributed to the county last year, if the hotel tax had been in effect, Cole said it wouldn’t have been enough to contribute significantly to the development of tourism.

“All three of us together wouldn’t have made enough to put in a street lamp!” she exclaimed.

Red Boiling Springs Mayor Kenneth Hollis said he will support the three hotels in their efforts to oppose the tax at the August 4th and 18th meetings of the commissioners.

“The hotels are struggling enough as it is without imposing this tax,” said Hollis. “We’re trying to attract more tourism to out town. We don’t want to take it away by raising the fees at the hotels.

“Even if people do come, they’re trying to save every penny they can,” he continued. “If they can only afford to stay one night, instead of two, that’s going to hurt the retail businesses in the town.

Neither was Pete Patel, owner of the Budget Inn, contacted by the Tourism Committee before their proposal to commissioners, as was reported at that meeting by a member of the Tourism Committee.

“What?” he asked on Monday, July 28. “A tax in addition to the 9.25% that is already taxed? I don’t think the public is going to pay this. They already don’t like the tax we have.”

On the other hand, Hearthstone Inn manager Joanne Lucke said that most people who call or visit the Hearthstone don’t ask about the tax.

“Most of them don’t pay any attention to the tax,” said Lucke. “My husband and I don’t, when we travel.”

Connie Brown, one of the eight owners of the hotel, was not available for comment; although she and her husband did attend the July 7 county court meeting in favor of the tax. Neither the Browns or any of the other owners are ever at the Hearthstone, according to Lucke.

The $18,000 hotel/motel tax income figure that was presented to the commissioners at their July 21 meeting was based on estimates from other counties, according to Three-Star Chair Linda McCrary.

“That figure was a guesstimate based on what happened in other counties of similar size and venues,” McCrary said yesterday.
“Three people in the county shouldn’t impact the good of the whole county,” said Tourism Committee Chair Carolyn Whitaker. “This tax is to help the whole county; this tax will help those hotels by brining more tourism into the county.”

“No one ever expressed their concerns to me,” said Commissioner Tony Boles, of his affirmative vote for the proposed tax. “I didn’t know they were against it. I probably wouldn’t have voted for it if I had known; but I don’t know that it would have changed my vote.

Commissioner Ralph Doss has a “wait and see” attitude about how he’ll vote when the issue comes up in August for the second reading.

“From what we understood, they [RBS hotels] didn’t oppose it,”  said Doss, referring to comments made by Whitaker and David Harper. “I’ve had a couple of calls by now, saying they didn’t want it. It’s hard to vote for something when it’s their livelihood, if they don’t want it. It’s hard to know how I’ll vote until I hear what they have to say next month.”

A proposal to the county’s budget committee, made last week by the county’s Tourism Committee, asks for the estimated amount of the hotel/motel tax income to be put into the 2009-2010 tourism budget, to be reimbursed by proceeds from the tax.

Currently, the tourism has a budget of $1,500 supplied by the county. The city of Lafayette donated an additional $1,000 this fiscal year (2008-2009) for a total of $2,500. On July 21, the Tourism Committee asked for an additional $2,500 this year.

That issue was scheduled to be heard and discussed at a budget committee meeting on July 28.