City reaps financial benefits of new hotel/motel tax
Date: 7/25/2012
By G. Michael Dobbs
news@thereminder.comSPRINGFIELD — Come this week, staying in a Springfield motel or hotel will be more expensive.
According to City Solicitor Edward Pikula, the new 1 percent local motel/hotel tax, which will go into the city's coffers, took effect on July 23 — 20 days after the Springfield City Council passed it.
The new tax is part of the revenue enhancement proposed by Mayor Domenic Sarno to fill this year's budget gap.
Members of the region's tourism and hospitality industry had hotly protested the ordinance when City Councilor Michael Fenton had discussed it during a Finance Committee meeting on Jan. 28, 2011. At that time the proposed tax was 2 percent — the highest allowed by the Legislature as a local option.
A letter from hotel owner Paul Picknelly released at that meeting detailed that Springfield has a 2.75 percent convention center financing tax in addition to a 5.7 percent state hotel tax and the current 4 percent city tax on rooms. If the city increased the city tax 2 percent, Springfield would have the highest tax rate in the region with a total of 12.45 percent.
In a compromise with the mayor, the City Council raised the local tax to 1 percent, an action that yielded mixed reactions.
Gene Cassidy, president of the Eastern States Exposition, said the tax is "bad for the city."
"It is something that hurts the Springfield economy," Cassidy told
Reminder Publications. "There is no way to sugar-coat the tax."
Cassidy noted that the year-round events presented on the Exposition grounds were the number one driver of hotel space in the area.
He believed that rather than setting up an additional tax, the city should be working more to promote itself to tourists and visitors.
Mary Kay Wydra, president of the Greater Springfield Convention and Visitors Bureau, said, "Given our mission to promote the Pioneer Valley as an attractive year-round destination, it is very difficult for the Greater Springfield Convention and Visitors Bureau to support any measure that increases the cost for someone to visit our region. With that said, the compromise increase of raising the rooms tax in Springfield by only 1 percent should still allow us to remain competitive. This tax issue is primarily a concern among meeting planners who bring large groups into the city.
"Our sales strategy for convention business positions Springfield and the surrounding region as an easily-accessible, affordable and high-value destination with an abundance of family-friendly attractions and unique cultural venues and we will continue to promote these attributes," she continued.
