Trumbull County commissioners are right in expecting their bed tax to be the same as Mahoning County's. The difference, though slight, puts Trumbull's hotels and motels at a disadvantage against their neighboring competitors.
However, commissioners are wrong in expecting Mahoning County to increase its bed tax to match Trumbull's. Instead, Trumbull should lower its bed tax to match Mahoning's.
Trumbull's tax on hotels and motels is 5 percent, the maximum allowed by law. Three percent goes to the Western Reserve Port Authority and 2 percent to the Trumbull County Tourism Bureau.
Mahoning's tax on hotels and motels is 3 percent, split evenly between the port authority and the Mahoning County Convention and Visitors Bureau. Despite the smaller tax Mahoning contributes about the same amount of money to the Port Authority because it has more booked hotel rooms.
That argument was used in 2010 to convince Trumbull's commissioners to increase their bed tax to 5 percent. The flaw in that logic is it fails to consider the impact on lodging owners. Trumbull's hotels and motels compete with those in Mahoning. Forcing Trumbull hotels and motels to charge a higher tax puts the businesses at a disadvantage.
Trumbull is now planning on lowering its tax to 4 percent, partly because Mahoning charges a smaller percentage and partly to protest a bonus the Port Authority awarded to Aviation Director Daniel Dickten. The Port Authority has since rescinded the $7,500 bonus for Dickten, who earns $75,000 annually.
Trumbull commissioners were right to be upset about how Dickten's bonus would be viewed by county employees who have had wage freezes for years. However, the commissioners have said nothing about the $155,000 annual salary plus expenses that Port Authority Executive Director Rose Ann DeLeon earns. Dickten has produced measurable improvements at the airport. DeLeon has little to no success stories in economic development for which she was hired and for which the Port Authority board wants each county to charge a 5 percent bed tax.
DeLeon is paid from about $500,000 in contributions made by each county, several local communities, the state and federal governments and a labor union. Those contributions will be exhausted when her three-year contract expires late this year. The funders are not likely to contribute again because of the lack of economic development generated by the Port Authority.
If the Port Authority believes so strongly in its executive director then it should ask commissioners to add a tax to plane tickets. The money could then be split between the tourism operations and the Port Authority.
That would be fair because, currently, hotels and motels collect a tax from its customers, gives that money to the counties, then has the counties send most of it to the Port Authority.
We're betting that the Port Authority board members who say an increased bed tax would have no impact on the lodging industry do not feel the same way about how a plane ticket tax would impact on airport operations.