Marketview Liquor

Back to Opinion

COMMENTARY: Empty pockets, empty rooms

Recommend Article
Total Recommendations (12)

By David Cay Johnston

Ask our Monroe County government a simple question, and the government will pay a lawyer to decide whether to answer.

The question: How much does Monroe County collect from the 6 percent hotel tax? (The tax is a levy that the county budget says is "to promote and enhance tourism.")

You might think that number would be in Maggie Brooks' 799-page budget. It is not. Instead, we get only the "allocation" of hotel tax money to various agencies.

I e-mailed my question to the logical person, the county budget director, Susan Walsh. She would not answer.

Instead, Walsh passed my question to the Finance Department. Six days later, the new finance director, Scott Adair, e-mailed to say that he would not answer, either.

Instead, Adair wrote that "to ensure compliance with the Freedom of Information law," I must fill out a form.

No such requirement exists in state law, but the county and many other local governments require such forms.

My formal request sought four numbers: hotel tax "collections" each year from 2005 through 2008. A clerk told me that a lawyer will decide whether the Brooks administration will answer.

Tired of game-playing, I rang up Paul Haney, a CPA who is the ranking Democrat on the County Legislature's Ways and Means Committee. Surely Haney knows, right?

"Sorry," Haney said, explaining that the Brooks administration does not reveal such numbers to the minority party.

Contrast this with how Brooks endlessly touts tourism as a boon to local taxpayers. Earlier this month, the tourism-promotion agency VisitRochester released its annual visitor spending figures. Brooks boasted that they "reinforce what we've been saying all along... that tourism is an economic engine."

But when adjusted for inflation, the data show a sputtering engine. Total spending by visitors in 2008 dropped 3.9 percent from 2007. Lodging revenue fell 5.6 percent.

Furthermore, a graphic that appeared in the county budget until 2007 indicated that hotel occupancy revenue has been flat since 1990, after adjusting for inflation. (I asked Walsh for the data points for the graphic and why it vanished from the last two budgets, but, again, no answers.)

A recent report by the Center for Governmental Research estimated that just 59 percent of hotel rooms in Monroe County were rented out in 2008, weak demand that means some properties are struggling.

These figures show that the market is not demanding new hotels.

Yet in March, COMIDA, the county's industrial-development agency, voted multi-million-dollar tax breaks for Steven Congel of Denver, who wants to demolish part of Medley Centre to build a residential, retail, and hotel complex, adding perhaps 450 hotel rooms. Congel is part of the billionaire family that owns Carousel Mall in Syracuse.

With hotel revenues nearly flat since 1990, with 41 percent of rooms going begging and a new Hampton Inn about to open near Medley Centre, why would anyone want to build hotels here? Oh, that's right; Congel can hold the land for next to nothing in taxes (while the rest of us make up the difference) and then get tax-advantaged financing thanks to COMIDA.

Assuming that Congel actually builds, doing him a multi-million-dollar tax favor is tantamount to Brooks deciding to bankrupt several of the 62 existing hotels in Monroe County, because there is not enough business to go around.

What analysis did COMIDA do of hotel demand before committing your tax dollars to benefit Congel? COMIDA has yet to decide if they will reveal what research, if any, they did.

So while you pay for lawyers to mull my question about hotel tax revenues, here is a question taxpayers should ask Brooks, who holds herself out as a fiscal conservative:

Why would the county give huge tax favors at your expense to a rich Colorado man in a deal certain to destroy some existing local businesses?

Comments for "COMMENTARY: Empty pockets, empty rooms" (5)

City Newspaper is not responsible for the content of these comments. City Newspaper reserves the right to remove comments at their discretion.

User Photo

Speedmaster said on Apr. 29, 2009 at 11:25am

>> 'The tax is a levy that the county budget says is "to promote and enhance tourism."'

How do you promote something by charging people more to do it?

User Photo

Tom Shevlin said on Apr. 30, 2009 at 1:13am

Hmmm. Kickbacks from construction contracts? No, that would be illegal. Don't give a damn about peoples money? No, that would be immoral. Looking for political favors? No, that would be unethical. Trying to further the secrecy of Gov't. No. That would be unpatriotic. Ya' got me. I have no idea what the County is up to and I think that is just the way they like it.

User Photo

David Cay Johnston said on Apr. 30, 2009 at 11:23am

Speedmaster, the idea is that visitors are taxed (on their hotel occupancy charge) to subsidize activities will attract more visitors. It makes sense to use such taxes to finance a visitors and convention agency so people who book conventions have a central place for information because that eases arrangements and by lowering transaction costs promotes efficiency; without such an agency a lot of business would go elsewhere.
But the value of some other spending is not so obvious: the county budget lists $1.5 million (nearly a quarter of the allocation) for "authorized agencies" with no detail and more than $360,000 for local sports activities.

User Photo

Virginia Maier said on Apr. 30, 2009 at 8:18pm

Mr. Johnston, If you search the NYS campaign finance disclosure site for "Friends of Maggie Brooks", you'll find that Bersin LLC (the Congel-owned subsidiary that owns the Medley Center and surrounding properties) is one of the County Executive's biggest campaign donors. I think that's part of your answer.

The book "Free Lunch" taught me to look for those connections. You should check it out :-)

You should also know that Medley is in an "Empire Zone," and as a result received over $600,000 per year in tax credits in 2006 and 2007 DESPITE being nearly empty. Imagine the payoff if they do even a little bit of development there! Oh, and guess who decides whether a business had done "enough" to be Empire Zone qualified (and thus get the tax breaks)? Monroe County.

User Photo

Wendal Smith said on May. 07, 2009 at 8:22pm

I usually don't agree with opinions expressed in this publication but this article makes the most sense of any thing I have ever seen published here.

Leave A Comment

(This will not be published)

(Optional)

Respond on Your Blog

If you have a City Account you can not only post comments, but you can also respond to articles in your own City Blog. It's just another way to make your voice heard.

Planned Parenthood of Rochester