Bed tax draws concern

• Meeting scheduled for Thursday to explain concept more fully
By Carey Restino
Homer Tribune

The Kenai Peninsula may be headed toward a vote over whether to institute a 4 percent bed tax for tourists. And many Homer business owners turned up at Homer’s city council to adamantly oppose the idea, saying it will drive customers away.
Kenai Peninsula Borough Assemblyman Bill Smith recently introduced a resolution that would put the idea of a bed tax before the voters this fall. The tax would go in part to support promotion of the Kenai Peninsula as a tourist destination; but under the current plan, most of the taxes garnered in Homer would go back to the city of Homer to be used for services that support the influx of visitors each year.
A meeting is planned at the Bidarka Best Western Inn on Thursday at 6:30 p.m. by the Homer Chamber of Commerce to air arguments in favor and opposition to the proposed tax.
Many local business owners spoke in opposition to the proposed tax. A recently formed group, the Homer Voice for Business, spoke in opposition as well, saying the bed tax would hurt Alaskans, since in-state visitors make up a large portion of the Homer tourist market. Others noted that the tax would be too steep for many visitors, who might choose to take their business elsewhere or spend less in other areas, such as eating out.
For people staying three nights, the tax would amount to $75 more for Homer Ocean Shores guests, said Mike Warburton.
“That’s one dinner,” Warburton said. “They’d probably stay somewhere else.”
Warburton said while the borough proposed tax would contribute money back to the Homer community, that allocation is really only a “gentleman’s handshake.” Elected officials cannot dedicate a tax unless it is passed by voters, he said.
Land’s End Resort owner Jon Faulkner testified that his conversations with the Discovery Channel, which has been filming in the Homer area in recent years for a documentary on the Kilcher family, the film industry said the tax would be a problem.
“They are the single largest impact to our visitor industry since I’ve been here,” Faulkner said, adding that the film company said the increase would “definitely pose a burden.”
Shanon Hamrick, executive director of the Kenai Peninsula Tourism Marketing Council which would receive funding from the bed tax, spoke to the council about what she noted was an emotional issue for many.
Hamrick said bed taxes are found throughout the state, with most coming in far higher than the proposed 4 percent tax being floated on the Kenai Peninsula. The whole objective of the tax would be to bring in more tourists to the region, not drive them away, she said. Other areas of the state are spending millions in advertising to promote their cities to potential visitors, while the Kenai Peninsula’s marketing budget is around $500,000, she said.
The bed tax would raise an estimated $2.4 million, 33 percent of which would go to marketing, while 56 percent would be returned to cities. Some 11 percent would be used for school funding under the current plan. If put in place, Homer is expected to receive $454,060, Hamrick said.
Only one community on the Kenai Peninsula, currently has a bed tax — Seward. Hamrick said the council has been unable to find data on the impacts of the bed tax on that city’s tourism figures, but said the Seward community is in support of continuing the tax, which has been in place for over a decade.
But business managers who have hotels in both Homer and Seward said the bed tax has been a factor, and the Homer hotel has done better than the Seward one. Land’s End Manager Mike Dye said he would bring information comparing the guest numbers at each hotel to the city council for review.
Hamrick said while she understands many business owners are concerned that the bed tax would negatively impact their business, she has a different perspective.
“People come to Alaska to see mountains, glaciers and wildlife,” she said. “The Kenai Peninsula has them better than anyone else.”
All of the current marketing has been toward promoting Kenai Peninsula cities as fishing destinations, she said, and with fishing in decline in many areas, that effort is off target. Visitors need to know more about what the communities have to offer beyond fishing.
“They can’t choose to come to us unless they hear about us,” she said.
Homer Chamber of Commerce director Jim Lavrakas said the Thursday meeting is open to the public. Speakers will present both sides of the debate he said and answer questions.
Hearings on the bed tax vote ordinance will be held at the July 1 and July 22 Kenai Peninsula Borough Assembly meetings in Soldotna.

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Posted by on Jun 24th, 2014 and filed under Headline News. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.

1 Response for “Bed tax draws concern”

  1. Patricia Cue says:

    I suggest that the municipalities and the borough do some very tangible improvements to draw tourists instead of taxing them. Start by zoning regulations that stop gravel pits, strip malls, auto grave yards, and well… there are so many ugly areas they are too numerous to list. Second. Try cleaning up the trash alongside the roads. The drive between Soldotna and Homer is becoming a disgrace. People are coming here for the beauty. Instead you are providing them with more ugly buildings and garbage and expecting them to pay more! Get a clue.

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