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Mayor Paul Soglin Still Wrong About Room Tax

October 4, 2016

Madison Mayor Paul Soglin released his operating budget Tuesday morning and there is much to ponder regarding his energetic proposals.  Some ideas will be openly embraced while others will be scorned.  Not placing funding for operating funds for a new Midtown Police District station or fire station for the Southeast Side that the finance committee moved up in the capital budget will doubtless bring some contentious feelings in the coming weeks.

But this post is not about the top of the page ideas which will dominate the discussions.  Instead my eye caught–again–the pointed jabs from Soglin concerning a common-sense law that the city needs to abide by, as does the rest of the state.

What irks Soglin is the state mandate which requires 70% of room tax revenues be dedicated to tourism development, promotion and marketing efforts.   In other words those monies can not be used for any wish list that may come to mind from the ones elected in the city.

The lodging industry agreed in 1967 to accept a tax on their guests to generate local funding to promote and grow local tourism.  What needs to be understood is this tax was never intended to be treated like a property tax that funds general municipal services. 

I have no interest, financial or otherwise, in lodging properties but lets be honest about this matter.  Those properties already pay their taxes and should be viewed in the same manner as other retailers bringing visitors into the community.

Soglin thinks the rub is that Madison’s room tax, which was adopted by local referendum to help fund Monona Terrace, should have been grandfathered out of the 70% mandate.    The GOP differed at the statehouse and eliminated Madison’s exemption and placed the 70% of room taxes under the control of a local board made up of representatives from the tourism industry.

I rarely agree with the GOP majority under the dome but with this matter I align with them.  I think the room tax monies should go towards tourism promotion and marketing.  Having worked with the assembly chairperson for tourism and hearing from people around the state as to why more promotion dollars were needed and how effective that use proved to be in creating additional revenue leads me to one conclusion.  It only makes sense to use the room tax for the purpose it was designed.

Earlier this year we saw how easy it was for the city council to offer up $400,000 to assuage their most vocal constituents.  With only that as a reminder of how quickly taxpayer money can be wasted it becomes very clear as to why monies designed for a specific purpose should not be allowed to be moved around for other purposes.

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