Hotel execs speak out against proposed Hoover lodging tax increase

The general manager of the Hyatt Regency Birmingham-The Wynfrey Hotel, speaking on behalf of representatives of 15 hotels located in the City of Hoover, urged the Hoover City Council to turn down a proposal by the mayor to double the Hoover lodging tax from 3 percent to 6 percent.

Speaking during the Monday, July 20 City Council meeting, Dominic Buompastore said that doubling the city tax would raise the total combined city, county and state lodging tax from 14 percent to 17 percent, costing Hoover hotels business to other area cities that have lower lodging taxes.

“An increase in taxes will undoubtedly compromise future business in our Hoover hotels, negatively impacting our staff, economy and millions of dollars in investments made by our owners,” Buompastore said. “We are hopeful that the mayor and council will consider the impact on future business when bringing this ordinance forward.”

The Hoover City Council tabled action on the lodging tax until its Monday, Aug. 3 meeting. Prior to the meeting, Buompastore had sent all seven city council members, Mayor Gary Ivey and other city leaders a letter signed by representatives of 15 Hoover hotels that oppose the lodging tax increase.

Paul Sharp, sales manager of the Renaissance Ross Bridge Golf Resort and Spa, also spoke before the council, telling the panel the proposed increase would make Hoover one of the highest occupancy taxes in the nation.

“Cities that do well are keenly aware of making sure lodging taxes are comparable. With this increase, we would be larger than Washington, D.C., Atlanta,” Sharp said. “If there is an increase in lodging taxes, all of those things go into consideration of whether they will bring their convention to your city or take it to another city.”

While city hotels enjoy a great relationship with and typically support the City of Hoover and the council, Buompastore said in an interview prior to the council meeting that “the entire Hoover hotel community” is united against the proposed increase in the hotel occupancy tax.

While supporters say this is primarily a tax on tourists, Buompastore said the lodging tax increase affects anybody who uses the hotel. Those who rent space for meetings, weddings and other events would also pay a higher lodging tax.

“The current lodging tax provides a distinct advantage over other Alabama cities, competing cities from other states and the city of Birmingham, which has led to unmeasurable conventions and room nights to our city,” he said. ”When you count business lost to the hotels, any proposed increase in revenue would be offset by that.”

  Hoover resident Dan Fulton, speaking after the hotel executives, urged the city council to pass the ordinance. "I urge the hotels to be good corporate citizens," Fulton said. "The city of Hoover and Hoover schools could really use the money."

The proposal by Hoover Mayor Gary Ivey was initially introduced at the July 6 council meeting.

Lyda said city leaders need to weigh heavily before they consider a substantial change in Hoover’s city tax structure, something he says hasn’t been done since 1999.

“Entering into a decision of this magnitude without a defined plan for reinvesting the revenue into our community seems premature, at best,” Lyda said.

Including the 4 percent the State of Alabama receives from the city lodging tax and 7 percent both Jefferson and Shelby Counties receive, this would increase the total lodging tax in Hoover from 14 percent to 17 percent. Hoover's 3 percent lodging tax generates about $1.5 million a year, so the boost to 6 percent would double that revenue.

Lyda said he wants more clarity on use of funds from the lodging tax increase.  The proposed ordinance, as worded today, simply earmarks the revenue for capital project and debt.

“Our community deserves the opportunity to know what we plan to do with $30 million of new revenue over the next 20 years,” Lyda said. “We're talking about an awful lot of money here, money that may can be leveraged for matching funds from other sources and further increase it's impact on our community.”

The tax would go into effect in October 2015. If approved, Hoover's 6 percent lodging tax would still be equal to or lower than most Birmingham area cities, Hoover Councilman Pro Tem Brian Skelton said.

Birmingham boosted its lodging tax to 6.5 percent tax in 2010 to help fund the building of Regions Field baseball stadium downtown to attract the Birmingham Barons from the Hoover Met.  

Homewood, Leeds and Bessemer all have a 6 percent lodging tax, while Irondale's is 7 percent and Fultondale's lodging tax is 9 percent.

However, Hoover's lodging tax rate would be double the 3 percent current lodging tax in neighboring cities Mountain Brook and Vestavia Hills. Skelton has said Vestavia and Mountain Brook officials are expected to consider raising their lodging taxes if Hoover raises its tax. 

Read more about the Hoover lodging tax hike proposal:

http://hooversun.com/news/hoover-city-council-to-consider-raising-lodging-tax-during-j/