At the Maine Innkeepers Association, we make it easy to communicate with our members, the people who own and manage the hundreds of hotels, motels, inns, bed and breakfasts, sporting camps and cottages. It has been our policy to share our mailing list with any member who requests it.
This is why we weren’t terribly surprised when GrowSmart Maine recently sent a letter to our members trying to justify its proposal for a 42 percent increase in Maine’s lodging tax. After all, there are few members of our organization who actually support the increase.
What’s surprising, though, is that GrowSmart failed to contact our members when developing this plan. If it really cared about what Maine innkeepers think is best for our industry, they should have reached out to us months ago for our input. After all, hospitality and tourism contribute more than $530 million a year to Maine’s economy.
The letter was too little, too late.
When I first learned about a proposal to increase the lodging tax, I polled our members to see if they would support a tax increase for any reason. More than 96 percent of those who responded said no.
Why?
Because Maine is already a challenging and costly place to do business. Because this tax increase promoted by GrowSmart will give Maine a higher lodging tax than New Hampshire, Massachusetts, Vermont, upstate New York, and many other places with which we compete.
As an organization, GrowSmart opposes sprawl and promotes public land purchases. Those may indeed be worthy causes, but it appears GrowSmart is trying to hijack the lodging tax as a way to pay for their plan.
Those of us in the tourism business know Maine needs another $40 million to properly care for parks, historic sites and public lands the state already owns. We should be focusing on taking care of what we already have, not raising loding taxes to potentially purchase more property.
The lodging tax is also being sold as “exportable,” meaning people from away will pay the increase.
Easy money, right?
Wrong. At many lodging establishments around the state, a majority of the lodging tax is paid by Maine customers. And many properties that depend heavily on out-of-state visitors in the summer months say they couldn’t survive without business from Maine residents the rest of the year.
One might assume in Freeport, with L.L. Bean and all of the other stores, out-of-state visitors would pay most of the lodging tax, yet one of our members, the well-known Harraseeket Inn, reports 52 percent of their lodging and meals taxes are paid by Maine people and 48 percent by people from out of state.
Our industry has gone along with recent increases in the lodging tax because we were assured some of the additional funds would go toward promoting Maine as a tourist destination. The current formula benefits all of us. If we collect more taxes, we have more money for promotion.
Today, 5 percent of the 7 percent meals and lodging tax goes toward tourism promotion. Under GrowSmart’s proposal, $5 million in one-time borrowed money, paid back over 10 years, would go toward tourism promotion along with our current funding.
This is half of what we would normally collect if the tax would be increased to 10 percent for other purposes.
No thanks. The idea of borrowing money for tourism promotion doesn’t sit well with our members, who know what it is like to balance the books every year.
There is no question that we always need new strategies to grow tourism in Maine, but let’s leave tourism planning and promotion to the tourism professionals, and land acquisition to the Land for Maine’s Future program.
This just isn’t a time for tax increases and more new programs.
Greg Dugal of Lincolnville is executive director of the Maine Innkeepers Association. E-mail him at greg@maineinns.com.
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