Port Authority Explains Need for Higher Bed Tax
YOUNGSTOWN, Ohio -- Occupancy at area hotels likely will increase with the development of the region’s oil and gas industry, one of the economic development activities the Western Reserve Port Authority is engaged in, a member of the port authority board said Wednesday.
Jim Floyd, designated by the port authority’s board to meet with reporters Wednesday, outlined the agency's economic development initiatives for about 40 minutes following an hour-plus executive session to address the bed tax issue.
Area hotel operators expressed strong opposition in late February to the proposed 2% addition to the area bed tax, warning the increase, which would bring the total tax charged to lodgers in county hotels to 14.75%, would drive business from Mahoning County hotels to neighboring counties. Most of the additional revenue was to be earmarked to fund the port authority's economic development initiatives.
Based on the experience in Pennsylvania, which has benefitted from oil and gas exploration in the Marcellus shale play, Floyd said, “We believe there will be a terrific increased demand upon the hotel industry,” particularly for lodging facilities that offer extended-stay arrangements.
Aside from the initiatives the port authority’s economic development arm is directly engaged in, operating the Youngstown/Warren Regional Airport “constitutes an economic development function" because the port authority is trying to develop new air service in part to support shale projects in the region, he argued. “Evidently a lot of folks fly in from Texas,” he said. “So there’s a lot of effort being made and those efforts suck up money also.”
In addition to providing commercial air service, which the port authority is looking to expand, and maintaining facilities for private aviation, the airport supports the adjacent Youngstown Air Reserve Station, which receives no Department of Defense money to maintain the airport.
“You talk about budget squeeze,” Floyd said. “The guys out there are very, very budget conscious.” The Defense Departmetn recently announced downsizing plans for several military facilities, including YARS, which is expected to about 130 positions.
Mahoning County received just over $500,000 each year in 2010 and 2011 at the current bed tax rate, with two-thirds of that going to the port authority.
Urged to expand its role in economic development by U.S. Rep. Tim Ryan, D-17 Ohio, the port authority hired Rose Ann DeLeon as executive director in November 2009. Funds for initiative were raised from Mahoning and Trumbull counties and several municipalities. Last year was the final year for payments from the two counties and the cities.
During the meeting, the port authority board members approved a $360,000 budget for the port authority’s economic development efforts for this year. Including the funds budgeted for this year, the economic development division has $666,874 in funds remaining from the contributions from the counties and cities.
DeLeon has been ill recently and was unable to attend Wednesday’s meeting. Sarah Lown, hired last year as senior economic development manager for the port authority, updated board members on her division’s activities.
They include efforts to identify and characterize industrial and commercial properties and to promote their redevelopment online. “The aim is to promote optimum utilization of land surrounding the airport in urban industrialized areas and other strategic locations served by utility and ready transportation access,” Lown said.
Other initiatives include assisting V&M Star with locating a site for an administrative headquarters near its new $650 million pipe, efforts to develop a multi-county bond fund, and its recent partnership with the Mahoning River Corridor Initiative to develop brownfield sites along the Mahoning River.
Floyd also said he has “no indication” what direction the Mahoning County commissioners will take on the bed tax issue. The commissioners did not act on the bed tax at their Feb. 29 meeting and it has not come up for official action since then. Commissioners did not respond to requests for comment Wednesday.
Copyright 2012 The Business Journal, Youngstown, Ohio.