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Some area hotel, motel owners upset by tax

2% occupancy tax passed by Lincoln County officials

BROOKHAVEN – An occupancy tax in Lincoln County that is expected to generate $61,000 for the recruitment of retirees to the area and to further develop the tourism market has some area hotel and motel owners up in arms.

The resolution was passed by the Brookhaven City Aldermen (5-2) and the Lincoln County Board of Supervisors (5-0) that directs local legislators to introduce legislation to levy a 2% tax on hotel and motel visitors to better fund retiree and tourism development.

“Since we started our retiree development program in 1996, we’ve estimating the impact from those efforts has generated $20 million for the local economy,” said Chandler Russ, executive director of the Lincoln County Chamber of Commerce.

Fifty-one retirees have relocated to Brookhaven because of the chamber’s efforts, Russ said. But, he added, this was done on a “shoestring budget.”

“We want to increase our participation in the national media in partnership with the Mississippi Development Authority,” Russ said. “We want to increase our efforts on the retiree side of things.”

And on the tourism side, the chamber plans to develop, at least by the third year of the tax, 10 annual events for Brookhaven or Lincoln County that encourage at least one overnight stay.

Through the resolutions that were passed by both the city and the county, local legislators are introducing legislation for the 2% tax.

“Historically if the issue has the support of the local governing bodies, it normally doesn’t face opposition in the Legislature,” Russ said.

Although it may not face opposition in the Legislature, it is already facing opposition in town by local hotel and motel owners.

Anna Smith, assistant manager of the Comfort Inn of Brookhaven, has been fighting the tax since she found out about it in the local newspaper.

“We’re not against the tax, we just want to make sure we’re represented well and the money being spent will go toward something that will be useful instead of being wasted,” she said.

Smith said she was upset because of the way she heard about the tax.

“The newspaper came and asked us for a quote,” she said. “They’re (the chamber of commerce) not even working with us at all.”

She is afraid of the way the money will be spent and how the hotels and motels will be represented. “They want to give us two seats out of a seven-member board,” she said. “They’re really not willing to compromise with us at all.”

Smith said Brookhaven has nothing to offer tourists. “We don’t have a bowling alley,” she said. “We’re a dry county. We’re just constantly competing with everybody. To charge (tourists) 2% more – that’s going to make our rates that much higher. People aren’t willing to pay what we ask now. We just want to make sure we’re represented fairly and taken seriously.”

Carole Swann, general manager of the Hampton Inn Brookhaven, objects to the way the 2% tax was handled as well.

“We found out about it through the newspaper, and when we asked for specifics about it, Chandler Russ drew up rules and articles,” Swann said. “This is not a tourism tax; it is a retiree and tourism tax. I don’t feel like the (hotel and motel) guests should have to pay for a retiree tax for Brookhaven.”

John M. Sullivan, who represents the Mississippi Hotel and Lodging Association as their lobbyist in Jackson, is monitoring the situation for Brookhaven while the city and Lincoln County’s hotel and motel owners lead the challenge.

“Heads on beds, whatever we can do to generate more tourism and more traffic to our hotel properties, that’s what we’re all about,” Sullivan said. “Taxes are a part of that. Obviously when communities like Hattiesburg, with regard to their new convention center, impose taxes, the convention center draws tourists and the tourists stay in hotels and that makes our members happy. When we have a situation like we have in Brookhaven where it may or may not generate tourism, it becomes a concern.”

Sullivan said the limited number of hotels in Brookhaven and the surrounding area are in a highly competitive market. He explained that a few dollars either way could cause a regular traveler to look closely at whether he or she stays in that property or in one down the road in another community that may be a little less.

“We always look for these issues to come forward with a front-end referendum. We’d like to have the community itself look at the issue, decide the issue and give our local properties an opportunity for a grassroots campaign either for or against it,” he said. “Our industry is committed to the communities in which they live. They depend on those communities for tourism and for their income – for their livelihood. We support those communities and, once again, we try to work with them.”

Sullivan suggested a local option sales tax as a way to solve the problem of a tax being placed only on hotel and motel guests.

“The local option sales tax could create the necessary dollars for these municipalities and give them an opportunity to forego the thought of always coming to the hotel industry for their sagging economies or failing infrastructures,” he said. “We’re not really sure how that’s going to play out; it’s just kicking around in the Legislature. But that is an across-the-board tax. A local option sales tax could provide communities with a wealth of opportunity without having to always come back to us.”

Swann liked the idea of a local option sales tax.

“I think if the tax money is going to anything other than tourism, everyone should be involved. I love Brookhaven. I raised both my children here. If we’re going to improve, that’s wonderful but let’s all work toward it.”

Jimmy Moreton, who is the incoming chairman of the chamber’s Brookhaven Retiree Development Committee, said the money brought in from the 2% tax would not go to waste.

“We are the kind of folks who are prudent with our dollars,” Moreton said. “We think it would pay big dividends in the future.”

Moreton said he had heard nothing but pro, rather than con reactions to the tax, with the exception of hotel and motel owners’ and managers’ reactions. “But it’s my opinion that they will really reap the benefits of it when they get the programs going,” he said.

Rep. Jim Barnett, M.D., of Brookhaven, like Moreton, believes the hotels and motels will benefit from the tax. “The money is going to be used to promote the community,” he said.

He pointed out that a clause in the bill provides that if people called for it, the issue would come to a vote, but he does not expect that to happen.

But, he said, “I’d be very pleased and certainly go along with a vote if they want it. Brookhaven is on a roll and has been now for three or four years. We have a lot going for us.”

Sen. Cindy Hyde-Smith of Brookhaven maintains that she is only doing what the people have asked her to do.

“We met with the chamber, and I met with the hotel owners and they’ve had it structured how they want to use it and have gotten a board to oversee the funds that it will generate. It would only be assessed on the hotel rooms in the city and one outside the city limits. We’ll just see if it comes out of the committee after it’s been introduced.”

Contact MBJ staff writer Elizabeth Kirkland at ekirkland@msbusiness.com or (601) 364-1042.

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