By Will Craig
At its Sept. 17 meeting, Door County Tourism Zone Commission member Dave Eliot of Baileys Harbor proposed raising the local room tax from 5.5% to 8%, an increase of 45%. That means, combined with the current state sales tax rate, the tax would increase from 11% to 13.5% of a lodging rate.
According to a recent Washington Island Chamber of Commerce survey of its membership, 95% of Washington Island lodging providers and businesses are not happy with the proposal. Lodging owners fear that the current room tax is high enough and raising the rates will drive visitors to different locations with a lower room tax, according to the Chamber. A major reason for raising the rate is so municipalities can increase revenue. At the September meeting, Eliot said Baileys Harbor “needs more money.”
Each tourism zone member municipality receives 30% of the tax proceeds. For Washington Island in 2019, the town received nearly $28,000, which they split with the Chamber of Commerce. If the increase had been in place in 2019, that would have amounted to just over $40,000.
The numbers for 2020 are not yet available, but, because of COVID-19 restrictions, they are anticipated to be down from 2019. Island businesses are hoping for a recovery in 2021 and say they worry a room tax increase will impede that recovery. The Tourism Zone Commission is composed of Sturgeon Bay and most of the villages and towns in Door County – 14 municipalities in all. The commission has 24 individual members because municipalities with over $300,000 in annual tax collections get two representatives. Linda Elmore from the Washington Island Chamber of Commerce is the Island’s representative. Josh Van Lieshout, city administrator for Sturgeon Bay, is chair of the commission.
Dave Eliot, town chair of Baileys Harbor, is the commission member proposing the increase. The town gave him permission to pursue developing a letter of intent that would raise the room tax to 8%. He also said that, with this proposal, the commission would begin charging $250 to lodging providers for the annual permit they need to run their business. He has been contacting other municipalities, pushing them to put the topic on their agendas.
Chair Van Lieshout said he felt things were moving too fast. It has been a long-standing policy that the lodging providers need to drive any increase in room tax rate. Several other commission members supported that view.
Eliot was not deterred. He said, “the Tourism Zone cannot say no to the municipalities. The municipalities created the Tourism Zone.” Van Lieshout conceded that point.
The current status of the proposal is unknown. The topic was on the October agenda, but no minutes are available and, Van Lieshout said, no letter of intent yet exists. Individual municipalities may be discussing the room tax increase, but the commission has made no decisions.
Sturgeon Bay has looked at the plan. Van Lieshout said the city’s finance committee is concerned about the burden on lodging providers.
Richard Tobey, chair of the Washington Town Board, has no strong feelings about the proposal. He said he dismisses the idea the Island would lose tourism business, at least to other parts of Door County, since the tax rate would be the same countywide. He also said he is happy with Elmore from the Chamber representing the town’s interests on the commission.
A formal letter of intent has yet to be presented to the full commission. An executive committee meeting is scheduled for Nov. 19, with the full commission meeting again on Dec. 17. Meeting agendas are posted on the Tourism Zone’s website and include Zoom addresses for those wishing to attend remotely (www.doorcountytourismzone.com and click on Meetings, then “agendas and minutes.”)
If a proposal to increase the Door County room tax from 5.5% to 8% succeeds, Gibson’s West Harbor Resort, like all Island lodging facilities, would begin collecting 13.5% of a lodging rate for taxes (5.5% state sales tax plus 8% room tax).