Thursday, March 01, 2012YOUNGSTOWN, Ohio – Mahoning County commissioners Wednesday approved a three-year contract with the Western Reserve Port Authority that would have it provide economic development services, then tabled voting on the tax that would fund delivery of those services.
Whether the additional 2% bed tax will be taken off the table when commissioners meet at 5 p.m. March 8 at the county Board of Developmental Disabilities Centre, Austintown, is unclear. The chairman of the commissioners, John A. McNally IV, explained that he, Carol Rimedio-Righetti and Anthony Traficanti intend to meet and further explore and discuss funding before next Thursday.
They could vote as early as next week or two weeks hence, he said, or possibly even come up with a different funding mechanism that would render such a vote unnecessary.
At the longest commissioners’ weekly meeting in memory, they agreed that the port authority is the best mechanism and legal entity to act as the instrument that creates jobs and attracts and retains businesses in Mahoning County. “All three of us are convinced that the port authority is the most efficient and effective arm [the county has] for economic development,” McNally said afterward.
The county would continue to use the Youngstown/Warren Regional Chamber but to a lesser degree and let the contracts in place expire.
The Regional Chamber will continue to play a role, McNally said, lauding its efforts and noting it can engage in and perform economic development functions the port authority cannot. The port authority, he stressed, has broader powers and can do more. “We want the Western Reserve Port Authority to be a stronger partner,” he stated.
The county general fund has underwritten Mahoning County’s contribution of $100,000 a year, McNally said. The commissioners want an alternate source and the increased bed tax seems the best route.
The 5% bed tax the county proposes to collect would have 3.5% directed to the port authority, 1.5% to the county Convention & Visitors Bureau. The current 3% bed tax has 2% going to the port authority, 1% to the Convention & Visitors Bureau.
Such an increase would have hotel owners in Austintown, Beaver, Boardman and Canfield townships adding 14.75% in taxes to their guests’ bills: 6.75% in sales taxes, a 3% township bed tax and a 5% county bed tax.
An opponent of the hike, David Kovass, owner of the Hampton Inn in Austintown, again questioned the legality of the bed tax revenues going to fund any economic development activities the port authority might provide Mahoning County. (READ PREVIOUS STORY)
At the press event Tuesday sponsored by the Mahoning County Lodging Association, Kovass claimed the state enabling legislation that routes bed tax moneys to the port authority is restricted to military use and operating expenses.
“Anything the port authority spends money on is an operating expense,” McNally, himself a lawyer, said. He hopes to see the port authority “use its legal powers to be more active in economic development.”
Among those legal powers, explains Sarah Lown, senior economic development manager for the port authority, are site development, brownfield remediation, shovel-ready site selection services, arranging competitive financing for companies that do business here, and helping companies take advantage of the enterprise zone and Foreign Trade Zone benefits available.
During the public comment portion at the outset of yesterday’s meeting, Lown urged commissioners to enact the tax. Asked afterward if the port authority could execute the new three-year contract without bed tax revenues, she responded that it could begin what’s asked “but not for the three-year term of the contract.”
She was also unsure how much in revenues the bed tax would generate, and hence didn’t know the value of the contract.
The Mahoning County Lodging Association said the bed tax directed $560,000 last year to the port authority and should the additional 2% be adopted, more than $1 million a year would go to the economic development entity. The executive director of the Western Reserve Port Authority, Rose DeLeon, does not dispute these figures.
Opponents of the increased bed tax, mostly the hoteliers, their families and employees, made most of the same points they first stated at the press event at the Hampton Inn & Suites in Canfield Tuesday morning.
Murray Davis, co-owner of the Davis Motel in North Lima, added two new twists. He asked McNally to recuse himself from voting on imposing the bed tax because he chose not to seek re-election. And he suggested that because opponents contend fewer rooms would be rented and vacancy rates rise, Canfield, Boardman, Austintown and North Lima would see “a rise in the crime rate” because hoteliers would be forced to cater to prostitutes and their johns “to make up for lost business.”
Proponents of the tax who addressed commissioners included officers of the Western Reserve Building & Construction Trades Council such as secretary-treasurer Jim Burgham and Mike Rapovy of Local 171 of the Carpenters union; Sheriff’s Deputy Sgt. T.J. Assion, president of Lodge 141 of the Fraternal Order of Police; McDonald Mayor Glenn Holmes; and a director of the Western Reserve Port Authority, attorney James Floyd.
Most were skeptical of the hoteliers’ claims of lost business and lower sales tax revenues because travelers would stay instead at hotels and motels in Mercer County, Pa., and Geauga County.
Copyright 2012 The Business Journal, Youngstown, Ohio.