A committee that recommends how to spend Petersburg’s hotel bed tax proceeds may not be meeting anymore after next year. The transient room tax committee this week voted to recommend dissolving their group and changing the way the borough handles the revenue in the future. Joe Viechnicki reports.

The borough charges transient room tax of four percent for people staying in the town’s bed and breakfasts, lodges and hotels. Some of that money has been paid to the Chamber of Commerce each year, with the remainder tradionally paid out in grants for visitor-related projects or services. That’s where the committee has come in, meeting annually to vet grant applications and make recommendations to the assembly.

Photo courtesy Petersburg Chamber of Commerce

Photo courtesy Petersburg Chamber of Commerce

Borough finance director Jody Tow is recommending a revision to the local ordinance that would move the bed tax revenue into a fund separate from the borough’s general fund. She presented the idea to the committee this month. “Basically this would dissolve the transient room tax committee,” Tow said. “Those funds in that special revenue fund would be tracked better than they are right now. Right now they get put in the general fund and we are using the money to pay the chamber of commerce, the visitor center and the transient room tax grants with that money. But it’s very hard to see.”

Tow said moving the money into a separate fund would make the transient room tax revenues and expenditures more transparent. And she thought that issue could become more important as the borough looked at what she called “major” budget cuts. “It’s different. But I don’t see the borough wanting to give out grants in the next few years for anything.”

Bed tax revenue for the borough has been totaling around 50-thousand dollars. The borough has been paying the chamber around 32-thousand dollars a year for operating the visitor center. On top of that, grants have been given out totaling between six and 12 thousand dollars a year in recent budgets. Past grants have paid for things like benches, art and park projects, and visitor marketing campaigns.

The money is designated for visitor related services in the community.
Transient room tax committee members Susan Erickson and Ron Loesch talked over the idea.
“What we’re giving up is our ability to grant money to non-profits that serve the visitor industry in Petersburg?” asked committee member Susan Erickson.

“Essentially yes but I would also like to remind the committee that some of our grant requests have been right on the margins of tourism related projects,” responded committee member Ron Loesch. He suggested that in the future it could fall to the chamber to maintain a pot of money paid from the borough to fund visitor industry projects. That would cut the borough, the committee and the assembly, out of the process of hearing and approving grant requests. Instead the assembly would only consider an annual payment to the chamber of commerce as part of the budget process.

The proposed ordinance language still has to go before the borough assembly. The committee voted to recommend that change at Tuesday’s meeting. The group has been meeting on an “as needed” basis, sometimes just once a year and Tuesday’s meeting could be the next to last if the change is approved. Committee members expected to meet once more next year to close out one remaining grant.

Also at Tuesday’s meeting Tow reported the chamber would be seeing a 24 percent increase in funding this year, because of an increase in transient room tax proceeds.