Concerns raised regarding occupancy tax hike proposal
Not everyone is on board with raising the county’s occupancy tax to benefit Chautauqua Lake and other lakes and waterways.
Pravin Patel is the owner and general manager of the Best Western and Quality Inn, both on Vineyard Drive in Dunkirk.
After hearing about the proposed rate hike from 5% to 8%, he sent an email to the county executive’s office and the legislature clerk, expressing his concerns.
“Having been in the hotel business in this county for many, many years, I have heard first-hand accounts of guests complaining about having an occupancy tax at all, let alone increasing this tax by 60%. Note: when guests account for taxes at a hotel, they do not only add in the occupancy tax, they also have to add the state tax which is 8%, so the combined tax at the hotel/motel would be 16% total. This figure will not go unnoticed by hotel guests,” he wrote.
In a phone interview, Patel further discussed his concerns.
First off, he calls the concept of an occupancy tax unethical. “Why is it every time they need money, why do they look at the hotel and hospitality? … People who are coming and patronizing our county, probably 90% of them are private people, so why are we penalizing them for putting their hand in our beds,” he said.
Secondly, he notes that many of the people who are his customers are there because of the Dunkirk/Fredonia area. “Somebody coming to Dunkirk, what do they have to do with Chautauqua Lake? The person’s just coming overnight to head to bed, take a shower in the morning, buy a cup of coffee and do their business,” he said.
When County Executive PJ Wendel first proposed increasing the occupancy tax from 5% to 8% during last week’s legislature committee meetings, he said the average customer wouldn’t notice the rate increase.
Patel isn’t so sure. “How do they know? Has anyone of them ever owned a hotel or worked at a desk to make this kind of statement? We deal with this kind of stuff on a daily basis. Not every person is complaining … but I have to fight for my customers also,” he said.
Currently the county collects a 5% occupancy tax, with 60% of the revenue going to promote tourism and 40% going to the county’s lakes and waterways.
Patel wonders how the tourism portion is spent. “We don’t where all the money is going. They don’t make any statement every year where where the money’s being allocated,” he said.
He would like to see some money be spent on Vineyard Drive. “Fix our drainage. We have a lot of flooding problems on Vineyard Drive. … Vineyard Drive is a lifeline for the Dunkirk/Fredonia area for the businesses,” he said.
Pravin Patel isn’t alone. Neil Patel, no relation to Pavin, owns multiple hotels in the southern end of the county and also questions how the money has been and will be spent “They’re not showing us as a hoteliers, where the money is going and where they’re spending the money,” he said.
He feels the county should do more to support hotels in the county. “If the hotel’s owners are collecting the money and giving it to the county, what are they doing for the hotels? They’re not putting up any billboard hotel signs or anything like that,” Neil Patel said.
In his mind, the occupancy tax is a “Ponzi scheme” where officials take money from hotel owners and use it for Chautauqua Lake. “They keep saying they’re spending this money to the lake, but it’s a state responsibility. It’s not the county’s responsibility,” Neil Patel said.
He also notes that it won’t just be visitors who will be paying this tax. He estimates that 10-15% of the people he rents to are county residents. Sometimes people stay in local hotels due to family issues or tragedies. Others may have out of town guests or simply want to rent a hotel locally. “Everybody is getting local people,” Neil Patel said.
Legislator Susan Parker, D-Fredonia, wants to see the county legislature table any increase to the occupancy tax.
“Legislators are being asked to vote in favor of an increase of 60% in the occupancy tax without presenting factual justification, any sort of plan or explanation for the use of the funds, or inclusion of stakeholders in the discussion,” she said, adding that a lot of the money the county has previously collected has not been spent. “With an over $900,000 surplus in the Occupancy Tax Lake and Waterways account and an additional $400,000 in the Travel and Tourism account, it is necessary that this resolution for a 60% increase in the occupancy tax fund be tabled for more information.”
The county legislature is scheduled to vote on the proposal Wednesday. If it passes, the New York State Legislature will still be required to give final approval.