Published: November 17, 2009 11:12 pm      

Vacation rental agencies voice opposition to tax increase

OAKLAND — Garrett County Administrator Monty Pagenhardt said he was surprised by the amount of opposition Tuesday from local rental housing representatives to the county commissioners’ request to be able to increase the hotel rental tax from 5 percent to 8 percent.

Sen. George Edwards and Delegate Wendell Beitzel attended Tuesday’s public meeting to hear the commissioners’ wish list for the 2010 General Assembly and to see if they could help those desires become political reality. Should such legislation become law, it would enable, but not require a tax increase.

At the current rate of 5 percent, the tax brings $1.5 million into the county, according to Wendy Yoder, director of finance. “Each percentage increase above that will generate another $300,000,” Yoder said. She based that estimate on existing rental activity.

That revenue, according to Commissioner Fred Holliday, can be used for two purposes, for economic development or the funding of the Garrett County Chamber of Commerce.

Nancy Railey of Railey Mountain Lake Vacations used an extensive and detailed presentation to oppose a hike in the tax.

Railey said rental fees for people visiting Deep Creek Lake have been negotiated to bargain basement prices. “I have never before seen this,” she said. “Tourists are responding to these price cuts and will travel more in 2010 than in 2009. However, they will demand rate reductions of 1.8 percent greater than the reductions in 2009, continuing the decline for another year.”

Railey said the number of reserved nights at her company have declined below 2002 levels and the fact that her market share (45 to 50 percent) has held steady reflects that other hosts have experienced the same drop-off.

Railey said the visitors will come, but when they have to spend a dollar more because of a tax hike it will be a dollar that is not spent on local goods and services.

Pagenhardt said the potential for a tax hike was not news to the local rental moguls.

“This legislation was introduced in the 2009 General Assembly. In fact, they knew that if the bill passed it would increase the tax to 6 percent this past July 1 and many agencies had already booked rentals based upon that amount.”

The bill, however, did not pass, because of what Beitzel called a last-minute administrative foul-up in Annapolis.

Others opposed a hotel rental tax boost.

Rob Michael, chairman of the board for the chamber of commerce, said he misses the golden days when Deep Creek Lake was visited by families with small children. He said those visitors can no longer afford a lakeside vacation. “Have we priced ourselves out?” he asked.

Michael referenced Big Bear Lake in neighboring Preston County, W.Va., as a place that still offers such family trips. “We don’t see that dynamic any more,” he said. “Be careful. Increasing the tax even 1 percent is a detriment. Word is out. A vacation in Garrett County is getting to be expensive.”

Ruth Seib of Coldwell Banker said she is not sure that raising the tax would bring additional revenue because of a combination of fewer visitors and declining rates.

Bill Weissgerber of Railey Realty asked that the $300,000 that would be generated by a 1 percent increase in the tax be raised by resurrecting a tax on beer in the county.

Karen Myers, owner of The Wisp/D.C. Developers, cautioned the commissioners to be very careful in considering an increase in the tax. “Don’t kill the goose that laid the golden egg,” she said.

Edwards and Beitzel said they would once again introduce the enabling legislation if it is the desire of the commissioners.

Contact Michael A. Sawyers at msawyers@times-news.com.