City officials consider increasing hotel tax

Jeanette Kendall and Donelle Pardee Whiting

The Peoria Area Convention and Visitor’s Bureau is on a roll.

In order to keep that momentum going, Brent Lonteen, the group’s president and CEO, gave a pitch to the Washington City Council Monday.

Lonteen said the PACVB had a healthy year last year with an emphasis on sports and tourism. The group landed the USA Rollersports for the summer 2009. Lonteen compared this event to two Illinois High School Association tournaments.

Lonteen said Five Points Washington, with its eight-lane competition pool, would be ideal for IHSA Regional swim meets.

“You have a great facility here,” he said, adding that the theater could be a huge draw for productions.

The group also increased the number of trade shows — from eight to 20 — in order to secure more business.

However, Lonteen said, the PACVB would not be able to continue to do in the future what it has done in the past-due to increased costs and a fund shortage.

“Even if the revenues stay flat, we still will not be able to do in 2009 what we did in 2008,” Lonteen said.

Lonteen, stressing the word area, referred to Peoria and surrounding communities, such as Washington, East Peoria and Morton, that benefit from the PACVB’s services.

In order to help the PACVB in the future, Lonteen said he is making the rounds to the area city councils to ask them to consider increasing the hotel/motel tax. Communities that are home rule, such as Washington, can do so at will. East Peoria and Morton, which are non-home rule, would have to get state legislation passed in order to do so.

The Morton Village Board passed a resolution in support of the bi-partisan bill, Lonteen said, adding that East Peoria officials had an informal vote in favor of the legislation.

The Illinois State Senate recently passed a bill that would allow the cities of East Peoria and Morton to vote to raise the hotel tax to 6 percent.

Peoria approved raising its hotel tax from 5.5 percent to 6 percent, effective May 1.

The city of Pekin is still discussing the issue, Lonteen said.

“Through this legislation, both the city of East Peoria and the Village of Morton can, if they choose, to raise revenues without encumbering the residents. I, along with the municipal leaders of East Peoria and Morton, think this is the best way to go,” State Sen. Dave Koehler (D-Peoria) said.

The PACVB has a tourism reserve fund to help secure events whose organizers would otherwise not be able to afford to come to the Peoria area. In turn, by the PACVB having this reserve fund to attract events, it creates tourism dollars when people from out of town come here to eat, sleep and shop, Lonteen said.

“It was two weeks ago this fund awarded $25,000 to the (National Softball Association) that’s coming to EastSide,” Lonteen said. “That’s not the first time that’s happened.”

Currently, Washington has a 5 percent hotel tax. City administrator Bob Morris said the amount of money raised by the tax for last year was about $8,000. However, Morris said does not know yet what kind of revenue increase Sleep Inn & Suites will bring.

By raising the hotel tax, it is generating money the city did not have before and can, therefore, invest without it being a constraint on the budget, he added.

However, Lonteen said by increasing the hotel tax, it would not burden Washington taxpayers. He added the hotel tax increase would have no effect on hoteliers. Washington’s 5 percent hotel tax is even with, or lower, than most towns, Lonteen said.

“People don’t look at hotel tax rates when they travel,” he said. “People look at location … amenities.”

Mayor Gary Manier said he talked with the hotels in Washington and received positive feedback.

In response to Morris asking where contributions from cities outside Peoria fit in, Lonteen said he is asking that the revenue from the 1 percent tax increase be invested in the tourism reserve fund.

Lonteen said his goal is to promote all Peoria area communities as venues for conventions and sports tournaments.

Despite Lonteen’s assurances, alderman Jim Gee, Ward IV, said, although he could see giving money to PACVB on a trial basis, he is opposed to raising Washington’s hotel tax.

Gee said he could see giving a donation or about 1 percent of the 5 percent collected this time.

Gee added he does look at the tax rate when he travels and he it infuriates him when communities “stick it to” travelers.

“I don’t want to see Washington become like those cities,” Gee said, adding that a 1 percent increase may not be that much, “but I don’t want to go there.”

Lonteen said, as an example, a 1 percent increase on a $75 room would add an additional 75 cents.

Alderman Don Brubaker, Ward II, said he is not against raising the hotel tax to 6 percent, but would prefer doing so on a two-year trial basis.

Alderman Jim Newman, Ward I, agreed, saying the council should see what kind of a return Washington receives.

“At first, I didn’t like it,” alderman Robert Brucks, Ward I, said. “But I would be for it on a trial basis.”

“I’m with you on a two-year trial. If you don’t feel you are getting a return on your investment, by all means, take it back,” Lonteen said.

“That’s the beauty of a home rule community. (City officials) can change it back if they want,” he added.