Marietta's hotel and motel lodging tax is expected to exceed $960,000 next year, with half of that amount going to the Marietta-Washington County Convention and Visitors Bureau.
The CVB would garner an estimated $480,865 from the lodging tax which represents the lion's share of the projected income for the bureau's 2013 budget, according to information CVB Executive Director Jeri Knowlton presented to Marietta City Council's finance committee Tuesday.
With $5,000 from the county lodging tax and another $80,440 in private income from memberships, Internet and visitor guide advertising, the CVB's total projected income will be around $566,305 in 2013.
That's an increase of more than $166,000 from the total income budgeted for 2012, thanks largely to the anticipated windfall in the hotel and motel tax in the coming year.
Projected total expenses for 2013 will be $543,630, up from the $406,793 budgeted for 2012, according to Knowlton. One major driver for the increased expenses is a wage increase for the CVB's employees who will now work 40 hours instead of 35 hours a week.
Another major expense increase will be $278,398 for marketing. The amount budgeted for marketing in 2012 was $173,751.
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"Why do you have an additional $104,000 budgeted for marketing?" asked Councilman Tom Vukovic, D-4th Ward, who chairs the finance committee.
"Marketing and advertising the region is our job," answered CVB board president Chuck Swaney.
CVB treasurer Michael Koker agreed, noting new marketing opportunities the bureau will be using in the coming year that include travel publications, social media, billboards and television.
Vukovic also questioned the $32,000 total increase in wages for the CVB's five employees.
Knowlton said the rise in wages is an effort to retain employees and included the move from 35 to 40 hours a week. But she added that the increased wages did not include benefits.
"Jeri met with the employees and asked if they would be interested in better pay or benefits," Swaney explained. "They wanted higher pay."
Vukovic asked if the CVB would be required to provide medical insurance benefits to the full-time employees.
"We would have to have at least 50 employees to be required to provide that coverage," Knowlton said. "I shopped around, and our cost just to get into medical insurance would be $25,000. And that cost would only go up every year."
She said that most organizations of the CVB's size typically do not provide medical insurance benefits.
Knowlton added that some challenges could lie ahead for medical benefits, including how President Barack Obama's universal health care initiative will impact employers.
Vukovic asked if the CVB planned to continue a memorandum of understanding agreement with the city that was initiated by the bureau this fall.
The MOU, announced by Knowlton in October, allowed the city to keep the bureau's share of any hotel/motel tax revenue above what the CVB had already budgeted for September through December of this year. That's expected to result in another $20,000 for the city's general fund by the end of the year.
Swaney said if there is no issue with the budget presented to the finance committee Tuesday night, he expected the MOU would continue under the same terms through 2013.
In other business Tuesday, the committee heard a presentation on proposed state legislation, House Bill 601, that city treasurer Valerie Holley and other municipal officials around Ohio say will have a significant impact on city tax revenues.
Holley said proposals contained in the legislation could result in a total estimated loss of $245,000 in known revenues, and additional costs and losses that could not be calculated at this point.
Among other mandates, HB 601 would create a Municipal Tax Policy Board with seven uncompensated tax administrators who would rule on all local tax issues and be responsible for creating all forms, policies, instructions, enforcement actions and publications used by all Ohio municipalities.
Those functions are currently the responsibility of each individual municipality.
Holley said a major concern about HB 601 is that it paves the way for the state to begin collecting taxes for all municipalities that will result in a significant loss of revenue for cities.
Ohio Rep. Andy Thompson, R-Marietta, who attended Tuesday's committee meeting, noted that HB 601 would die at the end of this month because the House of Representatives did not take up the legislation during this session.
"I wouldn't be too concerned about it right now," Thompson said. "This bill hasn't even been through a House committee or Senate committee."
But he expects the legislation will be re-introduced sometime next year.
Thompson said an original intent of HB 601 was to make it easier for businesses to operate in Ohio by eliminating multiple tax filings for those firms that do business in more than one municipality. But he admitted the proposed bill would require a lot of work before it could be considered for actual legislation.
