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10:53 AM Sat, Oct. 20th

General election could include vote on city bed tax hike

PRESCOTT ­ It could cost more to spend a night in Prescott this year.

Although a number of actions would have to happen first, Prescott voters could decide this fall whether to double the "bed tax" on hotels and motels from 2 percent to 4 percent.

The issue came up at the Prescott City Council's budget workshop this week as a possible means of generating more money for tourism promotion and parks projects.

City officials note, however, that the matter is still in the hands of the business community ­ specifically, the lodging industry, which collects the bed tax.

Only if the lodging community supports the increase, city officials said, would they put the matter on the ballot for a vote in the November general election.

After hearing back from the lodging industry, City Manager Steve Norwood said, the city likely will take the issue to the City Council ­ probably in the next 30 to 45 days. If support exists for the increase, he said, the council could opt to put it on the Nov. 8 ballot.

Meanwhile, the Prescott Chamber of Commerce and the Prescott Area Lodging Association are working to gauge the views of the lodging community.

David Maurer, CEO of the Prescott Chamber of Commerce, said the two organizations recently sent out letters to the several dozen hotels and motels in the community, asking whether the owners would support an increase in the bed tax.

"We're looking to the industry ­ to get their thoughts on whether a 2-percent increase would be acceptable," Maurer said.

Gary Edelbrook, president of the Prescott Area Lodging Association, said Thursday that he had heard back so far from about five of the owners, and all support the increase.

Maurer said the organizations would be following up with owners who have not yet responded to the letter. Both he and Edelbrook emphasized that they would follow the wishes of the owners. "If there is strenuous opposition, we would drop it," Edelbrook said.

But, as the owner of a local bed-and-breakfast, Edelbrook said he sees benefits to the increase: Not only would it put more money into tourism promotion, but it would also help to improve the parks that help to attract visitors to the community.

And Edelbrook maintained that a 2-percent increase in bed tax would not deter tourists from staying in Prescott. Many communities already charge more than Prescott does, he said.

At this week's budget workshop, Mayor Rowle Simmons said the recommendation from the lodging industry should be a deciding factor for the City Council. "They should give us a number, because they're the ones who are affected," he said. "It doesn't affect the taxpayers."

The voter-approved 2-percent bed tax went into effect in 1988, with the stipulation that the money go toward tourism promotion and parks.

Through the years, the annual amount from the tax has steadily increased. Just five years ago, the tax was generating about $220,000 per year. This fiscal year, city officials expect the tax to raise about $351,000, and next year city projections have the total at about $360,500.

The tax has also generated its share of controversy in past years. Almost every year, City Council members have debated the amount of money that should go toward tourism promotion.

Traditionally, the city has evenly split the bed tax money between tourism promotion and parks. Occasionally, though, the city has allocated additional money from its general fund to supplement tourism promotion, as well as for other related purposes, such as promotion of the Prescott Frontier Days "World's Oldest Rodeo."

For the coming fiscal year, city officials are recommending that tourism promotion receive $180,250, one-half of the bed tax.

But in addition, the tentative budget includes $25,000 for Christmas lighting at the courthouse plaza, $30,000 for the rodeo, and $30,000 for performing arts grants.

Council members suggested that an increase in bed tax might allow the city to include all of the tourism-related items under that fund.

Contact the reporter at cbarks@prescottaz.com