Putting more tax money towards tourism promotion may be the way for Schoharie County to gain more sales-tax revenue.
That’s what Carle Kopecky believes as he tries to rouse support for more spending on promotion in the 2009 Schoharie County budget.
But Mr. Kopecky may meet resistance because the budget is already likely to carry the first county tax hike in years.
Mr. Kopecky, director of the Old Stone Fort and a member of the Chamber of Commerce Tourism Committee, strongly backs the committee’s request for $140,500 in next year’s county budget.
The $140,500 is a sharp increase from the $46,500 the Tourism Committee received in the 2008 county budget. The Committee received $15,000 from the county in 2007.
But even though county Treasurer Bill Cherry opposes the increase, Mr. Kopecky and others believe it’s essential for the future of local tourism.
“Tourism is one of the largest generators of sales tax,” Mr. Kopecky said last week. “That revenue flows through the local economy many times.”
Putting $140,500 towards promotion could increase tourism, which in turn might raise county sales-tax revenue by $60,000, Mr. Kopecky said.
He uses that figure in a formula to show the committee is really only asking for an increase of $34,000:
The committee is already getting $46,500 and therefore is asking for $94,000 more. Subtract the possible $60,000 in increased sales-tax revenue, and the request may be only $34,000 more than this year, by Mr. Kopecky’s math.
“Can I guarantee $60,000 in sales tax? No,” he said. “Is this our best shot to raise more revenue? I can’t think of a better one.”
He argued that the county invests tax dollars to attract new businesses and should do the same to support existing ones.
Also, many tourism businesses are either small or non-profit and don’t have the budget necessary for promotion.
“But these businesses employ wait staff, maids, cooks––all these people are part of the tourism business,” he said.
A four-percent occupancy tax on motel and bed-and-breakfast rooms is expected to take effect late next year, and the intent is for the county to channel that revenue to tourism promotion. However, the Tourism Committee needs the $140,500 in 2009 to reach those occupancy tax dollars, Mr. Kopecky said.
The county Board of Supervisors will have the final say on the $140,500 request, and supervisors often follow the Treasurer’s lead.
And Mr. Cherry doesn’t support it.
“I can see that more tourism leads to more sales tax, but I don’t see that more tax money leads to more tourism,” he said.
There’s also no way to measure how much of an impact increased spending might have on sales-tax revenue, Mr. Cherry added.
Looking at the bigger picture, he said the economic times aren’t right to ask for more tax money.
“They’ve gone all this time without the money,” he said. “Us, the state, the nation, the world are in economic crisis. Why ask now?”
Although Mr. Cherry opposes the increase, Board of Supervisors Chairman Earl Van Wormer is ready to listen.
He knows the request is a sharp increase, and he also recognizes the tough economic climate.
“In hard times, if we don’t support them, we run the risk of losing them,” Mr. Van Wormer said. “My biggest fear is that doing nothing may be worse than doing something.”
He pointed to jobs and sales-tax revenue that may be lost if the county doesn’t help.
“We’ll take a look,” Mr. Van Wormer said. “Maybe they can scale it back a little.”
Mr. Kopecky agreed that doing nothing could be disastrous.
“If we do nothing, I can almost guarantee we’ll lose $60,000 in sales tax,” he said. “And if we go back to $15,000 [the ’07 amount], our tourism promotion effort collapses.”
Mr. Van Wormer cautioned, however, that if supervisors agree to the increase––or some of it––the Tourism Committee shouldn’t expect it every year.
“They should look someplace else, too, like the occupancy tax,” he said. “If we help them, I’d not like to see this as a long-term solution.”
Mr. Cherry is expected to release the proposed ’09 county budget on Tuesday, and supervisors will begin deliberations afterwards.