Borough weighing 1-percent hotel tax

New state law paves way for council hearing tonight.

By: Jennifer Potash
   Guests at hotels in Princeton Borough will soon see their bills increase and Princeton Borough is taking steps to get some of that money.
   The Princeton Borough Council will hold a public hearing tonight on a proposed 1-percent hotel tax.
   Also, the council will discuss the slow-moving Jefferson Road drainage project.
   The borough’s proposed hotel tax stems from a provision in the Fiscal Year 2004 budget package approved by the New Jersey Legislature and signed by Gov. James E. McGreevey last month.
   Under the budget, New Jersey will impose a 7-percent tax on hotels, motels and bed-and-breakfasts beginning Aug. 1. The new legislation empowers municipalities to charge an additional 1-percent tax. Starting in 2004, the state tax will drop to 5 percent and the municipal tax will increase to 3 percent.
   Municipalities have the discretion to distribute funds as they choose, but Princeton Borough officials have suggested proceeds from the municipal tax could help cover police salaries.
   The state and municipal hotel taxes would be imposed on top of the state’s 6-percent sales tax.
   In the borough, tax revenue from the 202-room Nassau Inn, assuming the lowest daily rate of about $200 with the hotel at full occupancy, could total $146,000 in the first year, and $438,000 annually thereafter, according to a memo from Borough Attorney Michael J. Herbert.
   The next largest hostelry is the Peacock Inn, 20 Bayard Lane, with 17 rooms.
   If the council adopts the ordinance tonight, it must be sent to the state Treasury Department. After the Treasury Department receives the ordinance, it could take effect 30 days following final publication, or about Sept. 1.
   Also before council tonight will be objections of a group of Jefferson Road residents to a major drainage project affecting their neighborhood.
   While work has resumed at the site, which includes Humbert Street, the residents demanded and the council agreed to an independent engineer’s review. The residents gave the borough the name of an engineer and now the municipality is awaiting the cost estimate for the independent review.
   The borough and the residents also disagree over the repaving of Humbert Alley, a narrow passage that runs between Jefferson Road and Moore Street.
   According to Judith Budwig of Jefferson Road, whose property abuts Humbert Alley, the residents want to make sure the alley does not resemble a public street in order to discourage through-traffic. The alley is a public right-of-way.
   Plans to repave the alley at a 9-foot width upset neighbors, who feared more motor traffic on the narrow lane, which they say is frequently used as a pedestrian pathway.
   Neighbors suggested using less asphalt and substituting other materials such as concrete pavers or stamped concrete in addition to curbing. But the costs could range from $18,000 to $33,000, according to estimates prepared by Borough Engineer Carl Peters. The current contract calls for $9,400 for this portion of the work, according to a July 11 memo written by Mr. Peters to the mayor and council.
   He disagrees with the Jefferson Road residents about the need for the concrete pavers.
   "The volume and the speed of traffic in the alley simply do not warrant the same expenditure of funds as Hamilton Avenue or Hodge Road," Mr. Peters wrote in the memo.
   The $348,000 drainage project is expected to relieve flooding problems on Humbert Street, Jefferson Road and Moore Street caused by storm runoff from the nearby Princeton Cemetery. The project is unusual because much of the work is taking place on private property. Construction delays, largely from a wet spring, combined with weeks of living with muddy driveways and yards, pushed many residents last month to protest the project with an early-morning blockade of Humbert Alley with their cars.