October 23, 2021

City copes with veto of bed tax

City of Cortland hotel and motel rooms will not see a 3% occupancy or bed tax increase this year, following a veto from Gov. Andrew Cuomo.

The city of Cortland failed once again last year to persuade the state government to pass a measure that would have allowed the city to implement the tax.

The city has tried and failed to do this several times, said Mack Cook, the city’s director of administration and finance. In 2019, however, the city saw its bills succeed in the state Assembly and Senate, only to have them vetoed by Cuomo on Dec. 20. The city’s previous attempts never made it to the governor’s desk.

Cortland County now charges a 5% occupancy tax; an additional 3% tax would have meant 8% in occupancy taxes for hotel and motel rooms in city limits, on top of 8% in state sales tax.

Tuesday night, the city council dealt with the budget ramifications. Cook said the city had anticipated generating between $150,000 and $176,000 a year from the tax, which would have gone into the capital budget and used for infrastructure improvements in the city’s “hotel corridor” near Interstate 81 and along Clinton Avenue.

The city had also crafted its 2020 budget assuming that Cortland County would allocate the city $50,000 through funds generated by its 5% occupancy tax. The county, however, rejected the city’s application for this money through a Tourism Marketing Grant, which the city sought as reimbursement for police overtime connected with tourist-attracting events in the city, such as the Summer Music Series and Chill-a-Bration.

Because the city failed to get this money, the Common Council voted Tuesday night to reduce the police overtime account by $50,000. Mayor Brian Tobin also suggested that further budget changes might have to be made in the future.

“We may have to have further discussions as the year progresses to make sure we are on track,” he said.

The city was not awarded the grant because “personnel costs are ineligible expenses,” states a Nov. 22 letter explaining the denial from Meghan Lawton, executive director of the Cortland County Convention and Visitors Bureau.

The council also passed another resolution, 7-0, to try again next year to get the state to pass a bill allowing the 3% bed tax; Kat McCarthy (D-1st Ward), who sits on the board of the Convention and Visitors Bureau, abstained.

In the memorandum accompanying his veto, Cuomo said he did not approve the city’s request or others like it because he did not want to pass further piecemeal bed tax increases for specific municipalities, but instead wanted the legislature “to develop a comprehensive statewide plan standardizing the hotel and motel occupancy tax.”

City hoteliers as well as the Cortland County Convention and Visitors Bureau actively opposed the 3% tax and had requested lobbying help to block the bills from the New York State Hospitality and Tourism Association as well as I Love New York.

Lawton said she was pleased with the governor’s veto.

“I think it’s a positive thing for the tourism industry as a whole in Cortland County,” she said.

She said that the Convention and Visitors Bureau would lobby again next year to block the 3% increase if the city continues to lobby for it.

Kathryn Silliman (D-2nd Ward) said Lawton wanted to bring these concerns before the council at its Jan. 21 meeting, but her motion to table the vote on continued lobbying for the 3% bed tax lost, 3-4.