December 6, 2021

Cortland sets hearing for tax on hotel, motel rooms

Bob Ellis/staff photographer

Kayla Comfort, general manager at Country Inn & Suites on Route 281 in Cortlandville, helps guests at the front desk on Tuesday afternoon. The city Common Council is considering creating an occupancy tax for guests at motels in the city in addition to a tax charged countywide at all motels, including the Country Inn and Suites.

The city Common Council has scheduled a public hearing for 6:30 p.m. April 4 to allow the public to comment on a proposed occupancy tax on hotel and motel room stays within the city.

If accepted, the city plans to petition to state legislators to allow the city to enact the 3 percent tax, bringing the total bed tax in the city to 8 percent.

Mayor Brian Tobin said the money raised from the tax could be an opportunity for the city to grow, raising money — nearly $240,000 a year — for infrastructure and possibly increase overnight stays at hotels and motels in the city, due to new attractions around the city, which could attract more travelrs to stay in Cortland.

There is already a 5 percent county occupancy tax on hotels and motels, so the added 3 percent would raise the tax to 8 percent for the hotels and motels within the city limits.

Tobin said the city does not receive any of the funds the county retains from the county’s occupancy tax.

Alderman Thomas Michales said he believes 3 percent is a small amount. On his travels, he has found that many hotels are taxed 5 percent from their local government.

Karin Richardson, manager of Seven Valley Motel, at 46 Tompkins St., said before the meeting that charging people coming into Cortland more money would not be fair.

“People coming into Cortland are spending money on restaurants and stores,” she said. “I think there are enough taxes. There should not be more layered on.”

Kayla Comfort, manager of the Country Inn & Suites, at 3707 West Road in Cortlandville, said the hotel could get more business because it will not have to assess the city occupancy tax.
“There are pros and cons about it,” Comfort said.

Jim Dempsey, executive director of the Cortland County Convention and Visitors Bureau, declined comment this morning, saying the proposal would be the topic of a meeting of his board of directors Thursday.

A letter from city Administration and Finance Director Mack Cook to council members states that the revenue from the tax would be deposited into a designated fund that could be used for projects such as:

— Rebuilding water, sewer and storm water infrastructure serving the hotels and motels.

— Constructing bike ways and pedestrian pathways that would link motels to recreational and commercial facilities.

— Creating a dog park in the vicinity of the motel cluster that will provide the hotels with a marketable attraction.

— Rehabilitate and modernize the visual appeal of the highways and streets used by visitors to access motels.

— Support events and attractions that promote the city and region as a destination, fostering increased motel room occupancy, grow the property tax base and generate sales taxes.

The city has 485 motel rooms with a five-year occupancy rate of 46.6 percent, Cook wrote. The average daily room rate is $96.22. It is projected the 3 percent tax would generate $238,000.

In a 2011 analysis by the Cornell University Department of City and Regional Planning on the effect of the occupancy tax on local tourism with a focus on Tompkins County, it concluded that if a 5 percent hotel tax is applied, a hotel operator could expect a 0.65 percent decrease in room stays holding other factors constant, according to the letter.