Some of the owners of Lambertville’s bed and breakfast establishments are unhappy at the tax, saying they felt the city was opting for only 2 percent.
By: Linda Seida
LAMBERTVILLE Members of the City Council on Monday unanimously approved a 3 percent hotel and motel occupancy tax that, according to Mayor David Del Vecchio, could pull in about $100,000 per year for city coffers.
The new tax will go into effect July 1.
Officials said the tax will offset rising expenses and the higher cost of living and help keep a lid on property taxes. In August, the City Council postponed action on the local occupancy tax for three months at the request of innkeepers, but putting it off is no longer an option because next year’s budget needs to be submitted soon to the state for approval, Councilwoman Cynthia Ege said.
Owners of three bed-and-breakfast establishments, however, said they were disappointed by council’s actions.
The proprietors, plus the owners of two more establishments, met last week with Mrs. Ege, Mayor Del Vecchio and Councilman Steven Stegman to discuss the occupancy tax. The owners of the Bridge Street House, the Martin Coryell House and the York Street House said Monday they left last week’s gathering with the strong impression officials would support a 2 percent municipal occupancy tax, rather than the 3 percent tax that was approved.
The mayor, Mrs. Ege and Mr. Stegman each said that was not how the meeting last week played out. No action ever would be decided outside of an official public meeting, Mrs. Ege said.
"During the meeting, at the very end, David said we have to take it back to City Council," Mrs. Ege said. "In fact, David was leaning more toward 8 percent starting Jan. 1."
There are seven businesses in the city affected by the new local tax: The Inn at Lambertville Station, the Lambertville House, the Inn of the Hawke, the York Street House Bed and Breakfast, the Bridge Street House Bed and Breakfast, the Martin Coryell House Bed and Breakfast and Chimney Hill Farm Estate and Ol’ Barn Inn. In total, establishments in the city offer about 100 guest rooms.
Last summer the state enacted a new law imposing a 7 percent occupancy tax on all hotel and motel bills in the state. The law also gave municipalities the option, beginning Aug. 1, of imposing their own 1 percent local tax on top of the state tax, for a total 8 percent tax on hotel and motel bills.
Under state law, the state’s portion of the occupancy tax drops to 5 percent on July 1, 2004, and the local tax can increase up to 3 percent on that same date. Lambertville’s new tax doesn’t take effect until July 1, which is why it was able to enact the higher 3 percent levy.
The state and local occupancy tax is on top of the state’s 6 percent sales tax that is also applied to local hotel and motel bills.
The occupancy tax is on top of the state’s 6 percent sales tax.
Innkeepers said the new local tax will put them at more of a disadvantage than they already are. Their customers already are going instead to New Hope, Pa., where the occupancy tax is just 3 percent, they said.
"I think that’s a big difference if we’re trying to encourage people to stay here," said Dan Whitaker, one of the owners of the Inn at Lambertville Station. He said the tax was especially onerous for guests who stay more than one night, such as those who attend conferences.
"They’re very much aware of New Hope," he said. "I think New Hope is in a big transition now. We’ve got to be very competitive with them."
He mentioned the resurgence of the Pennsylvania borough, particularly now with the opening of the Michener Museum satellite and the town’s flourishing arts and business communities.
"I agree the difference is rather marked" between New Hope and Lambertville, said Mark Roberts of the Bridge Street House. "Potential guests have even stated that to me. So they’re aware of that, too."
He is "absolutely" losing a good deal of business now, thanks to the state’s 7 percent occupancy tax, he said.
"My philosophy has always been just because the state’s allowing you to do it doesn’t make it right," said Mary Freedman of the Martin Coryell House.
"It’s not a free lunch," said Rich Freedman, also of the Martin Coryell House. "This money’s not dropping out of the sky. It’s going to have an impact on the business community."
Mr. Whitaker agreed.
"If they’re in New Hope, they’re more likely to eat and shop in New Hope," he said. "I think it’s going to have a big impact."
His repeat customers are educated consumers, he added, and some even travel as far as Delaware to pay a cheaper price for some goods.