By Sherry conohan
Staff Writer
EATONTOWN — An occupancy tax was imposed on hotels and motels for the first time and the cost of liquor licenses went up under a pair of ordinances adopted by the Borough Council aimed at raising revenues.
The hotel tax was approved 5-0 at the council’s Aug. 6 meeting, over the protest of the Sheraton Eatontown Hotel, which wrote a letter to the borough objecting to its plan to piggyback on a state-ordered tax.
The vote came after a public hearing at which no one from the public spoke.
The ordinance imposes an occupancy tax of 8 percent on hotel and motel rooms, with 7 percent going to the state and 1 percent going to the borough in the first year.
In the second year, beginning next July 1, the tax would remain at 8 percent, but the borough’s share would go up to 3 percent and the state’s share would dip to 5 percent. The state tax was instituted by the state legislature in the budget process as one of the measures to plug a burgeoning deficit.
Mayor Gerald J. Tarantolo noted that the state will collect the borough’s 1 percent share of the tax and return it to the town.
Borough Business Administrator Michael L. Trotta has said he calculates the borough will receive $108,000 in the first year from the tax, based on 70 percent occupancy of the 531 hotel and motel rooms in town. That sum will rise to over $300,000 when the borough’s portion of the tax triples, he said.
Borough Attorney Gene Anthony said earlier that if the borough wanted to get a 1 percent tax for the town this year, an ordinance imposing the tax had to be enacted within 30 days from the date the governor signs the legislation creating the tax.
In a letter dated Aug. 5 addressed to the Borough Council, Thomas Riccardi, general manager of the Sheraton, said it was upsetting to read about the proposed 1 percent municipal tax on hotels in the newspaper.
"As a local business, we not only support Eatontown’s community activities and pay substantial real estate taxes, but we also employ many local residents and draw business into the area, which has a beneficial effect on the businesses and the area in general," Riccardi wrote.
"As you are aware," he went on, "hotel occupancies are down due to the current state of the economy and the continued threat of terrorism. This is reflective in our operating results, which have declined since Sept. 11, 2001.
"The decision by the governor and now the Borough of Eatontown to impose occupancy taxes comes at the worst possible time for our industry and will only contribute to problems we in the hotel business are struggling with," he said. "The 1 percent municipal tax along with the 7 percent occupancy tax and the 6 percent sales tax will contribute to drive local business travelers out of our township.
"Please consider the ramifications of your proposal before a final decision is made," he asked.
But the council moved ahead anyway. Tarantolo later said he would ask the council to reconsider the application of the tax to those who live in motels and hotels, many of whom are low income. He said he also will write a letter to Gov. James E. McGreevey asking him to do the same on the state tax.
"My problem and the council’s problem is we saw dollar signs and lost sight of the human factor," he said. "To be perfectly honest, we missed it."
Another ordinance raised the fee for distribution and retail liquor licenses from $2,000 to $2,500 and raised the fee on liquor licenses for clubs from $150 to $188. It was passed 5-0 after a hearing at which no one spoke.
The council introduced an ordinance to increase fines on a number of traffic offenses, from parking tickets ($44) to moving violations (up to $200).
A public hearing is scheduled for the council’s meeting of Aug. 27.
In addition to raising money, the council also spent it.
The council passed a resolution awarding a contract for the purchase of a 2003 sports utility vehicle for the fire department to Multi Chevrolet, in Union, for $33,227. Multi Chevrolet’s bid was the only one received.
The council also awarded a contract for the purchase a 2004 or newer Peterbilt dump track for the Public Works Department to Jersey Shore Peterbilt Inc., in the Clarksburg section of Millstone Township, for $132,733.
The contract calls for Jersey Shore Peterbilt to provide a Peterbilt Model 337 111 BBC tandem axle chassis equipped with a 14-16 yard dump body.