KENT COUNTY, MARYLAND
COUNTY COMMISSIONER'S

PUBLIC HEARING - 08/24/2004

Public Hearing
Code Home Rule Bill No. 2-2004
Hotel Rental Tax

A Public Hearing was held on Tuesday, August 24, 2004, at 10:00 a.m. in the County Commissioners' Hearing Room, County Government Center, Chestertown, Maryland on Code Home Rule Bill No. 2-2004 which is:

An Act to repeal and re-enact with Amendments Section 152-16 of the Code of Public Local Laws of Kent County, Maryland, concerning the imposition of a Hotel Rental Tax and the rate thereof, and empowering the Board of County Commissioners for Kent County to impose by resolution a tax on a transient charge paid to a hotel located in Kent County, Maryland consistent with the provisions and authority of the Annotated Code of Maryland, Article 24, Title 9 (Revenue and Taxes), Subtitle 3 (Hotel Rental Tax), Part I (Definitions; General Provisions).

Commissioners Roy W. Crow, Scott D. Livie, and William W. Pickrum were in attendance as well as Susanne Hayman, County Administrator, Bernadette Van Pelt, Director, and Marie Brockman, Secretary, both of Tourism Development, P.A.M. Schaller, Director of Economic Development, Gail Owings, Director of Planning and Zoning, Amy Moredock, Environmental Planner, Jay Jacobs, Mayor of Rock Hall, Martha Shane, Innkeeper of Lauretum Inn, Chestertown, John Fedas, owner of Great Oak Manor and a developer, Chestertown, and approximately two interested citizens, and members of the media.

Notice of the public hearing was read into the record by Commissioner Pickrum.

Commissioner Pickrum asked those gathered if there were any comments.

Ms. Shane spoke in support of the proposed Hotel Rental Tax, expressing her interest that all of the money represented by the 2% additional tax be directed to the County's tourism development.

In response to Ms. Shane's question, Commissioner Livie reported that all the incorporated towns, with the exception of Rock Hall, has agreed to sign a Memorandum of Agreement, to waive the additional 2% tax to the County for the promotion of tourism development.

Mayor Jacobs spoke in opposition of the proposed Hotel Rental Tax. He reviewed the discussions that took place among the members of the Rock Hall Town Council and the representatives of the Town's business community, in light of the three meetings which took place with the Commissioners and Mrs. Van Pelt on June 1.

During the course of said discussions, only one member of the Town Council changed opinion; the majority each time voting in opposition to the proposed Hotel Rental Tax. Mayor Jacobs expressed his opinion that the County is not demonstrating enough financial support of tourism development. In addition, Mayor Jacobs suggested that it would be to the County's advantage to be able to boast that it is the only county in the State that has not increased the tax for its tourism development. He also expressed his opinion that Rock Hall has effectively developed its tourism, for which the County should take note.

John Fedas spoke in opposition to the proposed Hotel Rental Tax, citing, what is in his opinion, the short-term, detrimental effects of the public's perception of the proposed raise of the tax. He stated that Great Oak Manor charges the second highest room rate on the Eastern Shore and that the public might view the proposed increase in the tax as financially prohibitive, with the result that the public would spend less money on their boarding costs and spend less money at other businesses in the towns.

He suggested that the County increase its revenue base by increasing property taxes instead of a hotel rental tax, and encouraged the County to carefully and gradually plan its economic development.

In response to Commissioner Livie's question, Mrs. Van Pelt reported that the Kent County Lodging Association voted in support of the proposed Hotel Rental Tax with the proviso that all of the money raised by the 2% increase would be dedicated to the County's tourism development.

Commissioner Pickrum indicated that proposed Code Home Rule 2-2004 would give the Board the authority to change the Hotel Rental Tax by resolution; it would not give the Board the authority to, in fact, change the tax.

Ms. Hayman concurred, indicating that if said tax is changed by resolution, the Board could then determine how that additional money (i.e. 2%) would be used.

Third reading of the legislation will be held on September 7, the next legislative day.

This hearing was taped for reference and adjourned at 10:20 a.m


THE COUNTY COMMISSIONERS
OF KENT COUNTY, MARYLAND

Janice F. Fletcher
Executive Assistant

Approved: William W. Pickrum, President