KEVIN LEININGER: If County Council is serious about promoting Fort Wayne, it will increase the hotel tax

The $20 million, 136-room Hampton Inn opened on Jefferson Boulevard this week. Whether its customers will have to pay a higher room tax remains to be seen. (Photo courtesy Ray Steup)
Dan O'Connell
Joel Benz
Kevin Leininger

The way Visit Fort Wayne CEO Dan O’Connell sees it, three members of Allen County Council support a plan to promote tourism through a 1 percent increase in the hotel tax and three are firmly opposed — leaving Joel Benz as the swing vote.

“We’ll spend the next 30 days trying to document that this is a good method (to bring more visitors to town),” said O’Connell, whose organization would receive an additional $750,000 per year if council increases the tax from 7 percent to 8 percent, as authorized by the Indiana Legislature this year. On Thursday, Council delayed a vote for at least a month, with some members saying they needed more time to study the issues and arguments.

If O’Connell is counting on convincing Benz, however, he may be disappointed. Although Benz supports more funding for Visit Fort Wayne, he considers the tax-increase proposal to be dead and insists other sources of funds should and can be found — a position shared by other council members who also plan to vote “no.”

But if most council members support more funding for Visit Fort Wayne, is asking visitors to pay an additional 75 cents for a hotel room really more distasteful than other alternatives — especially when that extra 1 percent would provide the reliable revenue stream O’Connell says would allow his organization to attract an additional 1 million more visitors over five years?

“This is a huge opportunity to tell the world about what Fort Wayne has built: a wonderful Memorial Coliseum, riverfront, ballpark, Turnstone (athletic facility) and more,” he said. “This is the mechanism the state has provided to do that.”

To Benz and his council allies, there is a better way: Hotels and other businesses that benefit from conventions and tourism should voluntarily increase their contributions to Visit Fort Wayne, which currently gets 2 percent of the innkeepers tax, with the Grand Wayne Center the remaining 5 percent. County Council could make up any difference, if necessary, through its annual budget. That, he and other members noted, would give elected officials more control over how the funds are spent and the ability to adjust support should they choose to do so.

Perhaps the best argument against the increase was offered by Councilman Kyle Kerley, who suggested that with 1,000 hotel rooms under construction of planned, even the current level of taxation will generate additional revenue. The numbers indicate it’s already happening, in fact: The county hotel tax generated $4.36 million in 2014 but has risen steadily since then, topping $6 million in 2018, according to the county Auditor’s office.

Even so, O’Connell has the stronger arguments. Some have suggested Visit Fort Wayne raise money by offering memberships, but that has been tried and raised less than $50,000 a year — and only after a lot of time and $25,000 a year had been spent to operate the program. Such a program, he said, could also be seen as favoring large donors. And as Councilman Larry Brown pointed out Thursday, why would one hotel willingly pay more for marketing when the hotel next door could offer lower rates by refusing to contribute? And without more-effective marketing, all those new rooms might simply drive prices down, and hotel tax revenues along with it.

Councilman and former Allen County Sheriff Ken Fries suggested it is somehow less noble to tax visitors than it is to tax county residents, but make no mistake: If County Council votes down the tax increase and uses other sources to make up the difference, it will essentially be taxing residents for the benefit of visitors.

Visit Fort Wayne has a budget of about $2.2 million budget, which is much lower than many other Midwestern cities of comparable size. With the cash the extra 1 percent would provide, Visit Fort Wayne would spend $150,000 to expand sales and marketing efforts for national conventions; $120,000 to promote adaptive sports events at Turnstone and elsewhere, expand seasonal ad campaigns, attract more travel writers, promote the library’s genealogy center, place billboards and boost market research. And even then the county room tax would be less than Indianapolis’ 10 percent.

I admire council’s frugality and reluctance to increase taxes, but if Visit Fort Wayne’s goal is as worthy as most members say it is — and with such an ambitious campaign clearly requiring a long-term and sustainable funding source — the proposed tax increase is the best way to shed the image of “Fort Where?” once and for all and to ensure that visitors enjoying the attractions funded by local taxpayers also chip in their fair share.

This column is the commentary of the writer and does not necessarily reflect the views or opinions of The News-Sentinel. Email Kevin Leininger at kleininger@news-sentinel.com or call him at 461-8355.

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