The rush to tap a revenue stream through a lodging tax continued this week.
The latest measure likely to be introduced would allow the City of Newark to have its own hotel room tax.
The office of State Rep., John Kowalko, D-Newark, indicated the bill would be sponsored by State Rep. Paul Baumbach, D-Newark; Rep. Kevin Hensley, R-Middletown; State Sen. David Sokola, D-Newark, and Kowalko.
The bill differs from another piece of legislation that would allow any municipality to levy the tax.
Still another piece of legislation would allow New Castle County to levy the tax. That measure passed the House.
The new bill applies only to Newark, the third largest city of the state and is tacked on to authorized powers of the city granted by the General Assembly.
It is possible, that earlier legislation had not been gaining traction in Legislative Hall. The bill, at last report, remained in committee and municipalities have not been beating down the door in an effort to support the tax.
Newark, by contrast, continues to be aggressively pushing for the tax, which would be collected on 1,000 or so rooms in the city along Interstate 95.
Wilmington, the state’s largest city, already has a two percent room tax in place.
The tax is coming at the same time Newark is preparing to hold a $26 million bond referendum in June that deals with stormwater and other infrastructure issues in the city. Some have expressed misgivings about holding both the bond issue and at the same time pushing for the room tax legislation
“The question that must be asked, why single out an industry that is growing that supports so many job and continues to add employees, where others have left or declined in recent years. In order to support more growth, which leads to more jobs, elected officials need to think twice about risking a tax that will lead to a decline in travelers to our area,” said William Silva, president of the Delaware Hotel and Lodging Association.
Silva continued, “Hotels also pay all taxes that imposed on all businesses (property, sewer, school tax) just to name a few. The tax revenue generated by the hospitality industry saves every household in Delaware over $1,100 per year in taxes. We are the third largest industry in the state and growing.”
Delaware already levies an eight percent room tax, which is used to balance the state budget but also finances county tourism activities and for beach replenishment.
Revenue sharing is commonplace around the nation, but in the case of the New Castle County and Newark tax proposals, all revenues would go straight to city and county coffers.
Both Newark and the county have rejected suggestions for revenue sharing for tourism marketing efforts.
The region does tend to have high lodging tax rates. However, areas such as Baltimore, Philadelphia and Atlantic City have amenities such as major league sports teams and other attractions that draw more tourists in the first place.
