Some cities and towns in New Hampshire have long said they should be able to keep more of the economic benefit they bring to the state through tourism.
Right now, much of that benefit goes to the state through the meals and rooms tax. A new bill would address this - it would give municipalities the option of collecting an extra two dollars a night from hotel room rentals in their areas, including Airbnb rentals.
The bill passed the New Hampshire House and was discussed in a hearing in the Senate on Wednesday.
Assistant Mayor for the city of Portsmouth, Cliff Lazenby, testified at the Senate hearing, and spoke with NHPR's Peter Biello about what the legislation would mean for Portsmouth.
The following transcript has been edited for length and clarity.
So I understand the city of Portsmouth is in support of this legislation. Why?
Well, we have been for quite a long time, and we're happy to see some traction in Concord this year. A lot of it has to do with being able to help support the hospitality industry and the infrastructure that's needed for that, but also to relieve burden on residents and taxpayers for the infrastructure that is needed for that industry.
Can you talk about what kind of infrastructure this two dollars a night would help pay for?
I think some of that would be up to the municipality. I think the intention [of] the legislation is that this would, in some respects, support tourism, but in other respects, the infrastructure. The way I would look at it as a city councilor would be services and things that are directly impacted by having hotels. So you need fire, police, emergency, all of the sort of services you can imagine. And it's a different type of impact for a hotel than it is for a typical business or a resident.
You say this might help the hospitality industry, and I understand what you're saying with respect to infrastructure and how that might help the hospitality industry, but I imagine there are some in the industry -- hotel owners and maybe Airbnb owners -- who don't want to have to have an additional tax levied on what they're doing.
There may be. What's remarkable, and I think helped with the momentum this time around, in Portsmouth the Chamber of Commerce, not only supports the legislation, but they've worked with the hoteliers in Portsmouth who also support it. Because they see that this is something that helps make hospitality and tourism more sustainable moving forward. I also think it's a win for the state of New Hampshire, and we tried to encourage that in the hearing today because there's rooms and meals tax that goes to the state of New Hampshire that helps communities throughout the state. And I think helping support this industry, making it easier for the community is good for the state as well.
The [meals and rooms] tax, as originally designed, was supposed to send some money generated in any particular town back to that town. There was a certain percentage, but since the Great Recession that percentage hasn't really been met. Would it not make more sense to simply fix the [meals and rooms] tax to have it function as it was intended -- to send more money back to places like Portsmouth?
Certainly; you bring up a major issue and a big motivator for having this legislation. I think both can coexist very well. But last year, our businesses, our community sent over 27 million dollars in meals and rooms tax revenue to the state. We got back about one and a half million, and that's far below what we were supposed to be getting back. And the prospects for fixing or changing that in Concord don't seem particularly strong. It's a fight that should continue. I think it's the right thing to do, it's the way the statute's designed. But either way this type of legislation gives those residents and their representatives a choice to make this. There's no requirement at all across the state to do it.
This two dollar fee would contribute to the sustainability of the hospitality industry in the tourism industry in Portsmouth. Can you clarify for me the ways in which right now the hospitality industry is not sustainable?
I'm not sure I would say it's not sustainable now but it is one of those things where the more of it that you see crop up, we hear more from residents about some resistance about, hey is the impact they are causing, is that being taken care of? Are we receiving the benefits as a community to having them here? And I think this helps put that in a better direction.
It seems like it might be a tangible sign that these tourists are doing something for the community, even though one could assume that tourists are coming into the community and spending their money.
That's right. And I think it's also the kind of thing that speaks to the growth rate we've seen that has been steady, and also gets the idea of whether this type of fee somehow hurt our competitive advantage in the state. And I just don't see it. There's been strong, strong growth. You see people coming here. I don't think they're going to be discouraged by a dollar or two fee when they want to come to the Seacoast or the Lakes Region or throughout the state.
