NorCo Collecting Hotel tax From Airbnb

Steve Barron

Airbnb is a global internet travel community enabling people to rent out their homes and become hospitability entrepreneurs. There are 140 hosts in Northampton County who welcomed 8,800 guests to share their homes in the past year. In 2017, the typical host took in $3,900 in annual income from sharing their home for approximately three nights per month. Starting this month, Northampton County will be collecting hotel taxes from this online service.

This issue was first raised by Steve Barron in 2016, when he was the county controller. He estimated the county could be adding $100,000 annually to its coffers by imposing its hotel tax on rentals arranged online through Airbnb. His research at that time showed numerous short-term online rentals at private homes.

“This places traditional hotels and bed and breakfast establishments on a more level playing field," argued Barron. "It is not fair to ask one entity or person to pay and not another, no matter how large or small.”

Former Executive John Brown, citing "the complexity of the issue," never moved forward.

Barron is now the county's Director of Fiscal Affairs, and Brown has been succeeded in office by Lamont McClure. McClure and Barron negotiated with Airbnb, and Northampton County is now collecting hotel taxes from this online room finder.

“We’re glad Airbnb has reached this agreement with us,” said McClure. “Our hotel taxes are used to promote tourism and economic development. They provide an important stimulus to our economy.”

Non-profit organizations and municipalities can apply for grants from the Hotel Tax fund to promote events and activities within Northampton County.  The Hotel Room Rental Tax is 4%.

NorCo Council Approves $500,000 in Hotel Tax Grants

Bruce Haines

Northampton County is expected to generate about $2 million in hotel tax revenue this year, based on a four per cent hotel room rental surcharge. Most of that money goes to Discover Lehigh Valley, a bi-county tourism bureau that also helps fund the Lehigh Valley Economic Development Corporation. In addition, the Steel Stacks Performing Arts Center and PBS-39's broadcast studio will collect $270,000. The rest of the money, nearly $500,000, was awarded in the form of hotel tax grants at Council's January 21 meeting to 32 different organizations. These were based on applications vetted in advance by the County's Department of Community and Economic Development, and are designed to promote community development or enhance tourism within Northampton County.  A list of the various projects considered is located here.

These grant requests were originally scheduled to be considered the previous day at Council's Finance Committee.But a bomb scare phoned into the courthouse earlier that day resulted in an evacuation, and the building was off limits until about 4 pm, right around the time that the committee had been scheduled to meet. Road blocks set up around the perimeter of the courthouse prevented access until after the meeting had been scheduled to start. As it happened, several of those turned around were grant applicants who wished to address Council.

I raised this possibility to Council before they started yesterday, having no idea at the time that I was actually right. Go figure.

"How many people are there who are on their way in here, who wanted to speak to this issue, who were turned around?" I asked. "We don't know."

Meeting at a place where the public had been turned away all afternoon is a pretty obvious violation of the Sunshine Act. Our open meetings law specifically provides that "the right of the public to be present at all meetings of agencies and to witness the deliberation, policy formulation and decisionmaking of agencies is vital to the enhancement and proper functioning of the democratic process." But that right fell by the wayside for a Council that was unwilling to do the right thing and reschedule the meeting.

Glenn "I wanna' be a Congressman" Geissinger, who chairs the Finance Committee, decided that the show must go on. And without the public's presence, that's precisely what it was. "While I understand your concern, I don't believe we are violating the Sunshine Act," he ruled. "So we will proceed."

This was great news for a few hardy souls, like Hotel Bethlehem's Bruce Haines and the Bach Choir's Bridget George. They had managed to slip in under the velvet rope, and had their hands out. Thanks to their well-reasoned arguments, Council voted to increase their funding. But others like Lynn Cunningham of the Bethlehem Chamber of Commerce and Gerry Yasso of the VIA Marathon, had been turned away. The Committee voted to reduce Yasso's funding, even though the VIA Marathon is without a doubt the most worthy application in terms of promoting tourism and hotel stays. Geissinger's Committee also recommended the elimination of a $4,000 arts study, even though applicant Randall Forte was among the missing, and as it happens, was one of those who were turned away.

Prior to the Council meeting, County staffers called applicants and told them they were welcome to pitch their projects. But many who had already been turned away once were unable to adjust their schedules at the drop of a dime. Some did come.

The "Docents on Main" and "Blacksmith Shop Demonstration," which had been pitched by Bruce Haines the previous day, saw their funding by $10,000 over the $55,000 recommendation. The Bach Choir will get $18,000 instead of the $13,000 allocated by County staff. The South Side Film Festival will get $1,000 instead of nothing, thanks to some juggling by Ken Kraft.

Gerry Yasso managed to get his funding restored, thanks to an amendment proposed by Geissinger.

Randall Forte of the Lehigh Valley Arts Council did get a chance to pitch his project, but was still shot down.

Lynn Cunningham was unable to squeeze a nickel for website redevelopment for the Bethlehem Visitor site. She had sought $15,000. She was asked whether she sought the money from the CEO of the Lehigh Valley Economic Development Corporation, who just happens to be her husband. "I have not but I'm sure I'll read about it on Bernie's blog tomorrow," she joked.

He was a last resort.

Did NorCo Council Committees Violate the Sunshine Act?

roadblocks around courthouse

Yesterday, Northampton County Council's Personnel Committee was scheduled to meet at 4 pm. The Finance Committee was supposed to meet as soon as the Personnel Committee was finished. But the 1 pm bomb scare threw a monkey wrench into things, and really prevented people from getting into the courthouse. So in my view, these meetings needed to be postponed to comply with the Sunshine Act. They went on anyway.

When the courthouse was evacuated yesterday, roadblocks were set up along the perimeter of the courthouse, preventing access. These roadblocks were still up after the "all clear" had been given, though only for about ten minutes. I know this because I had left the courthouse and was unable to get through until about 4:10 pm.  The only reason I persisted is because I was told about he "all clear." But how many people who intended to visit one or both of these committees left?

Yesterday, the Finance Committee was reviewing $753,000 in hotel tax applications from nonprofits all throughout the county. My concern is that there may have been applicants who intended to pitch their projects but were unable to do so because they had been turned around.

I voiced these concerns to Council, and suggested the meeting be rescheduled. That suggestion fell on deaf years.

Obviously, applicants who made it to the meeting would have little sympathy for those who did not. But I expected better of Council.

Oxford educated Bridget George made an impassioned plea for additional funding for the Bach Choir, which receives 20,000 visitors every year from 33 different countries. Her funding had been cut in half from $20,000 to $10,000, and it appears that Council will restore it.

Hotel Bethlehem Managing Partner Bruce Haines was no less effective in his pitch for docents used by Historic Bethlehem in its downtown and at its smithy. The administration had proposed a $10,000 cut but Council appears to be ready to restore the $65,000 requested.

John Cusick had concerns about a grant by LV Arts Council, but no one was present from that group to pitch its small grant request.

You can see the hotel tax grant applications here.

$753k in Hotel Tax Grants Sought in NorCo

Since the hotel tax first started 15 years ago, Northampton County has sought grant applications from agencies that promote tourism, and traditionally award them as part of the budget. That didn't happen this year because DCED Director Diane Donaher's attempted to seize control over nearly $500,000 in hotel tax grants, and hand them out as she sees fit. When she went so far as to suggest that she might even hand the entire sum over to Andy Daub's Northampton County Historical Society, and let him decide where that money could be best spent, the top of Lamont McClure's head flew off and has yet to land. Daub is a major GOP contributor, and McClure is a Democrat.

Though Executive John Brown fell on the sword for her and took the blame for this incredibly undemocratic idea, I personally think he had no idea himself what the hell she was planning. He quickly reversed course and told Council they would have full authority over these applications, but there were none. Donaher had told these agencies not to bother applying. She had to start the grant process in November, and it is only now tat they have been received and rated by her department.

As you can see below, there are $753,000 in applications, but Donaher is proposing that only $481,000 be awarded. The requests are below. What do you think? This is participatory journalism in which you may have knowledge about these applications that is very beneficial to those who make the final call. I would say that Celtic Classic, the Miracle League and Easton Ambassadors is money well spent. Mobile Stage lighting for the Totts Gap Arts Institute? Not so much.

These grants will be awarded in February.

2016 Hotel Tax Final Recommendations

Hotel Tax Grants Postponed Until January

Ken Kraft holds binder with $753,000 in hotel tax applications

Pursuant to state law, Northampton County collects a 4% hotel room rental tax from every hotel. That revenue must be used for tourism and community development. Over the years, between thirty or forty different groups like the Bach Choir, Celtic Classic and Historic Bethlehem Partnership have been awarded grants from Council as part of the budget process. They are rated by DCED, but Council has the final say. Except this year.

Earlier this year, DCED Director Diane Donaher, with no authority from Council took it upon herself to suspend a longstanding practice under which tourism grants were solicited by her department, rated and then presented to Council for a final vote as part of the budget. It's unclear whether she even had authority from Executive John Brown, who claimed there was a failure in communication.

She had told organizations like State Theatre and Kreidersville Covered Bridge not to bother submitting applications. Then she announced to a stunned Council on October 14 that she herself, instead of the people's elected representatives, would take control over the nearly $500,000 in hotel taxes used for this program.

Donaher explained that she was considering giving all or a large portion of it to the Northampton County Historical Society, and let it decide how the money should be spent. "We're looking at changing the process," she said.

Council was outraged, and Executive John Brown reversed her a few days later. But thanks to the delay imposed unilaterally by Donaher, none of them will be seeing any grant money this year.

Before Council's Finance Committee met on November 19, Donaher dropped off a thick binder for each Council member, full of grant applications for $753,000 from a total of $496,000. None of the applications has been rated or vetted, as has been done in past years.

The implicit message, at least to Ken Kraft was "Do it yourself!"

"I'd like to throw it at her," Kraft said of the binder. "She's not doing her job with her bloated staff. They want us to sit here and do their job. This is nonsense. This is passive aggressive."

Brown tried defending Donaher, claiming there was "no intent to remove hotel taxes from your purview." But he admitted, We missed the mark. I own that. I take full responsibility."

"I don't think it's doable," said Hayden Phillips as he looked through the thick binder. He suggested that the awards be postponed until January, to give Council time to review them. In the meantime, Brown assured Council that the DCED would rate the applications, as has been done in previous years.

Brown Restores Hotel Tax Grants Process

NorCo DCED Director Diane Donaher's plan to seize control over nearly $500,000 in hotel tax grants, and hand them out as she sees fit, is officially dead. Executive John Brown told Council yesterday that he is restoring the normal hotel tax grants application process so that groups like State Theatre, Blue Valley Farm Show and Bach Choir could receive some funding to promote tourism. But because Donaher refused to take applications earlier this year, groups like Celtic Classic and the Kreidersville Covered Bridge are going to have a difficult time putting together applications on such short notice.

Council was completely unaware what she was planning until last week's budget hearing, when she went so far as to suggest that she might even hand the entire sum over to Andy Daub's Northampton County Historical Society, and let him decide where that money could be best spent. The top of Lamont McClure's head flew off when she said that, and it's still on it's way to Mars. Daub is a major GOP contributor, and McClure is a Democrat. .  .

Personally, i think she just threw that out there. The person she was really seeking to empower was herself.

Brown is shooting to have these grants voted on at the November 21 meeting. Thanks to Donaher's refusal to accept applications earlier this year, it's  unclear whether applications can be put together that quickly.

State Theatre Wants $35k Increase in Hotel Tax Revenue

State Theatre artist?

At the November 15 meeting of Northampton County Council, Easton's State Theatre asked that its annual allocation of hotel tax money be increased from $25,000 to $60,000. CEO Shelley Browne explained that the explosion of events centers in the Lehigh Valley has made it more difficult for the nonprofit to book acts. "We can't pay what other venues can pay," she stated.

Browne told Council that the State Theatre helps drive Easton's economy, especially the "wonderful explosion" of downtown restaurants, to the tune of $8 million per year. But under questioning by Tom Dietrich, she indicated that Easton has made no financial contributions to the State.

Of course, that's because Easton collects no hotel tax. These are not real estate tax dollars but hotel tax proceeds, which are to be directed to programs that will promote tourism.

Browne and her development director took pains to point out that the State Theatre is a nonprofit, a "dicey financial model."

"I'm concerned that, year after year, we're going to have to contribute more and more of our hotel tax to your bottom line, stated Council member Lamont McClure. Council member Bob Werner told the State that the National Endowment for the Arts has $150 million available for grants.

The average artist's fee is around $50,000, with another $50,000 to produce the show.

From the peanut gallery later in the meeting, the Northampton County Bulldog, Ron Angle, criticized Council for failing to ask one very important question. "None of you asked the two people standing here what their pay was. It may be a not-for-profit, but what do the people working in the not-for-profit make? It may interest you to know it's the low to mid 6 figures for both of them. But again, what's another little handout from the tax money?"

The most recent 990 for the State Theatre on file reveals that, as of May 31, 2011, CEO Shelley Browne was being paid a salary and benefits package of $155,503. It's about $2,000 less than she was paid the preceding year. She is the only employee with a 6-figure income.

I don't like the idea of hotel tax money being used to promote tourism when we have overflowing homeless shelters, but until state law changes, this does seem like a good investment with lots of returns for Easton.