|Hotel taxes from Historic Hotel Bethlehem|
will subsidize its competitors
This impacts Northampton County because the services provided by Discover LV and LVEDC benefit both counties. Less money for them hampers their ability to provide service to the Lehigh Valley, including Northampton County.
"Nobody knew about this," noted NorCo Council Prez John Cusick at yesterday's Finance Committee. "Nobody here certainly knew about it. LVEDC and DiscoverLV woke up to find out they were going to be short $300,000."
Cusick had problems with the way this legislation was adopted and the diminution of services that will necessarily follow from DiscoverLV and LVEDC.
Ken Kraft is a union business agent who has represented trade union workers inside the NIZ, where he helped negotiate a Project Labor Agreement for the arena and may very well be conflicted. He attempted to downplay the obvious diversion. Kraft indicated Northampton County will be paying about $20,000 more per year to Discover LV and LVEDC. "It's really insignificant in the whole pot."
Council members who have no financial interest in building or renovating hotels inside the NIZ had a much different view than Kraft.
Matt Dietz noted that hotels outside of the NIZ will be paying into the hotel tax program while hoteliers inside the NIZ will be doubly benefiting by being able to divert hotel taxes for construction while still receiving services from DiscoverLV and LVEDC.
"It didn't seem to be done on the up and up," added the Colonel, Hayden Phillips.
"It just doesn't sound right," agreed Peg Ferraro. "All these other hotels are contributing hotel tax, but this group of hotels get to keep the taxes. ...It's just a very flawed thing ... like Obamacare. Once you pass it , you can read what's in it."
"That's a really poor analogy," complained Kraft.
Tonight, Council will introduce a resolution condemning the uneven playing field created by requiring hotels to pay a tax that benefits other hotels that compete against them. If adopted, it will call on the legislature to repeal the diversion of hotel taxes.