County raises ‘lodging’ tax to 5% – creates additional tourism revenue

On Tuesday the Warren County Board of Supervisors took advantage of a state legislative initiative adding the county to the list of municipalities that can charge higher transient occupancy (aka lodging) taxes.  The legislation was House Bill 1415 passed by the General Assembly earlier this year.

It allows Warren County to charge up to a 5% transient.  The county transient occupancy tax was previously capped at 2%, where it has been set.  The Town’s transient occupancy tax is currently 6%.

Only one person spoke at the public hearing, Brent Jackson, who is general manager of the Holiday Inn on Shadows Drive on the county’s northside near the Blue Ridge Shadows golf course.  Jackson spoke in favor of raising the tax to the newly-allotted level as a revenue generator for tourism.  A letter from Front Royal-Warren County Chamber of Commerce President Niki Foster also supporting the initiative for that reason was also put into the record.

It’s awfully pretty in Warren County in the springtime, as illustrated by this view of the Holiday Inn on Shadows Drive. The hotel’s General Manager Brent Jackson spoke in support of the proposed ‘lodging’ tax hike because the revenue will go to stimulate tourism here. Photo/Roger Bianchini

“Since most lodging guests are out-of-county residents, visitors or tourists the additional tax would not be paid by county residents,” Foster wrote, adding, “As tourism is a vital part of our community’s economy, the additional revenue collected from this increase could provide further marketing and promotion for our community’s tourism assets …”

Now the ‘hard’ part

After the unanimous vote to raise the tax to the allotted 5%, the discussion turned to handling the additional tax revenue, which must be designated exclusively to tourism and travel promotions.

Happy Creek Supervisor Tony Carter estimated the county receives about $80,000 in revenue from the current 2% lodging tax; and estimated an additional $100,000 from the additional 3%.  The county currently gives 5% of its existing lodging tax revenue to the Town of Front Royal as part of the Route 522 Corridor Agreement.  Carter said the Town take from the current 2% tax is about $4,000 annually.

The Happy Creek supervisor then said he thought the new revenue should be outside the corridor agreement designed to compensate the Town for extension of its water and sewer utilities into the county corridor in the late 1990s.  That Town utility extension was instrumental in facilitating the explosion in county commercial and industrial development in the north corridor. – “Or we could give the Town the money and they could give us a receipt and spend it on tourism,” Carter added dryly.

Carter then acknowledged the presence of Front Royal Mayor Hollis Tharpe in the audience, and wondered if the mayor could unilaterally resolve the issue right then – “Absolutely,” Tharpe replied, drawing laughter.

More seriously, Carter told his colleagues the matter should be added to the next (May 18) town-county liaison meeting agenda.  However other than perhaps precedent setting, the dynamic of moving THIS particular revenue stream toward tourism promotion is a fairly moot point.  Tharpe and Carter both later acknowledged that the Town does all the tourism advertising for both the town and county anyway – get that receipt ready, Mr. Mayor.

Alas, another potentially bitter Town-County financial conflict avoided …