Town Of Lincoln Unsure If Room Tax Legal For Dome Project
A proposal to raise the room tax in three municipalities by 3.5% for three years to raise funds for upgrading artificial ice making at the Dome hockey arena was tabled by the Lincoln town board last week to evaluate if it was legal, to evaluate a lower tax over a longer period, and to determine if a sufficient number of individuals would personally sign a bank note to repay a loan, thereby avoiding a room tax increase altogether.
Jerry Burkett, admitting he was the “defacto volunteer” chairing the fundraising effort for the Dome, indicated the need to replace the artificial ice making equipment saying “we're one leak away from DNR closing us down.” Burkett admitted the proposed room tax increase was “met with controversy left and right” but he has 10% of the estimated $650,000 cost in pledges just for the ice plant with the estimated total price tag somewhere around $1.2 million to $1.5 million. “I'm changing the proposal since there are six or seven other projects the Dome needs,” Burkett said. “I'm proposing to extend the period of the room tax beyond the three years and to lower the increase; I'm proposing raising the tax 2% for a five year period.”
Tom Obrodovich felt the “compromise of 2% is good for five years” but the communities need to “step forward and take some risks to keep it operational.”
But Jake Alward of the Chanticleer Inn reminded everyone the “room tax was created by the lodging industry to bring lodgers into Eagle River, for publicity out of the area, at least 100 miles away with the exception of Wausau.” Alward indicated there were nine lodging places in Eagle River, 36 in the town of Lincoln, and 51 in the town of Washington that collect room tax. Lincoln town attorney Steve Lucareli was unsure if the room tax could be used for this purpose. He indicated he would contact the Wisconsin Towns Association for an opinion and would also ask if the ERRA received these room tax funds from the municipalities if they would then be subject to Chapter 19 Wisconsin Statutes having to do with open meeting and open record requirements. He felt if the Dome was under municipal ownership it would be legal.
Burkett indicated the Eagle River city council adopted the increase subject to its legality. “The Dome is managed by volunteers who are trying to keep hockey affordable, making public skating available and affordable, and they are making it work by limping along. To me a smaller impact for a few more years in palatable.” Burkett said.
Ron Van Dusen, operator of two motels in Eagle River, supported the proposal saying “each of us benefit differently from different events and hockey tournaments bring in many visitors; this is the easiest way.”
Dean Safer of Gypsy Villa felt it “ironic telling us lodging operators how to run our business” while others felt a sales tax would be more appropriate having “everyone pitching in” while other statements were “we want to help but we want everyone to help” and town supervisor Bill Hassey wanted to identify the avenues for fundraising saying “nobody in this room wants the Dome to fail; that's an accomplishment.”
Sue Alward supported the Dome but questioned why “96 businesses guests pay? Let's not tax one business.”
Then Burkett surprised everyone with another proposal, asking “how many people here would sign a bank note that they are willing to repay a $650,000 bank loan?” About seven persons raised their hands. Burkett asked people who will sign a bank note to e-mail him at firstname.lastname@example.org.
The Lincoln town board then voted 4-0 to table the proposed room tax increase until a legal opinion can be looked at and if the option to transfer ownership to a municipality was feasible.