Bed Tax Concerns New Philadelphia Ohio

       On Monday, June 24, the Finance Committee of the New Philadelphia City Council met to discuss the imposition of a three-percent (3%) bed tax on the motels, and other overnight lodging businesses within the city.  Should the tax be passed by the city council and approved by the Mayor, it would increase the city’s revenue by approximately $200,000 a year.

       This increase in city revenue, while not an economic cure for New Philadelphia’s worsening financial stability, would help to keep the city from the disaster of a possible bankruptcy. 

Consider the following:

The Estate Tax in Ohio has been repealed.  This alone has reduced income to the city by two million dollars this year already;

Income tax revenues are down $55,000;

Businesses are experiencing decreased sales due to increased prices combined with decreased personal income;

State contributions to the city from the state have been reduced, as have those from the county;

The recent round of pay increases for city employees amount to almost 8% in the next three years, some of those the raises being retroactive to January of last year, others to January of this year;

City maintenance costs have risen along with the rate of inflation.

       Increases to city funds will help alleviate an impending financial crisis, and if the increase in revenue can be accomplished without adding additional hardship on the taxpaying citizen of New Philadelphia, so much the better.

       But wait.  We’re talking $200,000 here.  Like road kill on a country road attracts vultures, new revenues attract people and organizations who believe that they are entitled to a piece of the take just because it is there.  Think not?  Well, get a load of this.

The local Experimental Aircraft Association (EAA) based at Clever Airport in New Philadelphia, wants $50,000 as its “educational projects bring many visitors to the city airport.”  I belonged to the EAA in past years and appreciate what it does, but the use of city tax money to support a flying club really does not make sense.

The Athletic Department of the New Philadelphia Schools, wants $50,000 according to the president of the Quaker Club.  After all, they have made improvements to the stadium, which the School Department rents for a dollar a year.  They feel they deserve the money as football games bring people into town and the school contributes to the stadium maintenance. 

      The Tuscarawas County Convention and Visitors Bureau (TCCVB), in a letter to the City Council, requests $100,000 (50%) of the collected bed tax for their use, at their sole discretion.  $75,000 of this would be given to local facilities including but not limited to local museums, historic sites and the downtown of the city, beautification of public property including public parks, bike and hiking paths, the Tuscarawas River, and special events.  $25,000 is recommended to be spent for crosswalks and other capital expenditures.  Incidentally, if more than $100,000 becomes available because of an increase in bed tax revenues, the TCCVB wants the same percentage of payment (50%) from the bed tax if it exceeds the original $100,000.

Then there is Councilman Zucal.  He wants the money from the bed tax to be spent on specific projects, and get this, which are specified by legislation which means forever.  Remember, we are dealing with around $200,000 a year here.  Here’s his plan:

$70,000 (35%) to be spent for an Economic Development Director, who would be charge of the enhancement of the economy and climate of the city.  What ever happened to the Chamber of Commerce and the CIC?  Oh, yeah.  We can’t forget the secretary to help the new director out and the salary and benefits that would go along with that job.

      $10,000 (5%) for operating expenses of Schoenbrunn Village which is owned, operated, and funded, by the State Historical Society.

$10,000 (5%) for operating expenses to support Trumpet In The Land.

$10,000 (5%) for operations of Tuscora Park.

$10,000 (5%) to support the Quaker Club, an intrigal part of the New Philadelphia School System.

$30,000 (15%) to no more than six nonprofit organizations to be named later.

$60,000 (30%) to be given as grants for unnamed projects.

Let’s see.  Zucal’s plan spends the whole $200,000 (100%) proposed bed tax revenue on some very interesting places, only one of which, Tuscora Park, which is owned by the city and currently funded through city taxes.  The remainder of Zucal’s recommended spending plan goes to organizations which are not even a part of the City of New Philadelphia. 

The Quaker Club, as a part of the New Philadelphia Schools, is a separate political entity with its own taxing system, administration, and budgeting, and as such contributes nothing to the City from its over ten million dollar yearly budget.  The school system, supported by the real estate taxes of the citizenry of New Philadelphia, additionally charges its student families for sports, music instruction, books, and then wants additional money from the bed tax to pay its bills.

The Tuscarawas County Convention and Visitor Bureau is funded by state and county taxes and responsible for increasing tourism in the entire county.  Most of the projects mentioned in the request for $100,000 from the proposed bed tax are not in the city of New Philadelphia.  The suggestion that the TCCVB should also take over responsibility for projects such as painting crosswalks for motels is ludicrous.  Such projects are the city’s responsibility, not one of an organization wishing to grab funds from a city bed tax.

The fact of the matter is that New Philadelphia is going broke.  The bed tax is a partial solution to keeping the city solvent and by accomplishing that, keeping the State of Ohio from coming in and taking control of our city as it has already done in several cities.  I say a partial solution because until New Philadelphia city management, Administrative and Legislative, face the fact that the city is in need of realistic budgeting and acts accordingly, it will never achieve a sound financial state.

The bed tax should be passed.  However, the ordinance creating it should specifically stipulate that all income from that tax must go into the city’s General Fund and may not be spent without proper legislation by the City Council and approval of the Mayor. 

Legislation of a tax which does not directly have a favorable result for the citizenry should be defeated, no matter what the personal, political, or other gain, may be realized by members of city government.