WAUKESHA - A proposed
change to the way communities statewide are able to charge and spend
taxes levied on hotel rooms, if approved, could cost local
municipalities hundreds of thousands of dollars in the coming years.
Legislature is considering a proposal to amend its “room tax” that
could reduce the amount of money municipalities can use from
collecting that tax on emergency services, such as police and fire,
and require it be put toward hotel advertising, according to the
League of Wisconsin Municipalities.
In an open letter to Wisconsin communities, League of
Wisconsin Municipalities Assistant Director Curt Witynski said the
hotel industry is pushing to give hotel owners exclusive control
over how the tax money is spent.
“Communities that adopted room tax ordinances prior
to 1994 must reduce their support for police, fire, parks and
streets and spend more of that money on hotel advertising,” he said
in the letter. “The amount cities can use for essential services
will be frozen this year and reduced over the next five years until
it is down to the dollars collected during the depths of the 2009
Witynski claims that as many as 69 communities in
Wisconsin could be affected, including the cities of Brookfield, New
Berlin and Waukesha.
“If it is passed the way it has been proposed, the
city will lose up to $250,000, approximately, from its general
fund,” Waukesha Mayor Shawn Reilly said to city alders during a
Common Council meeting Tuesday. “Obviously you all know how much
that will affect the city of Waukesha.”
He urged council members to reach out to their
representatives in Madison - State Reps. Scott Allen, R-Waukesha,
and Adam Neylon, R-Pewaukee, as well as State Sen. Paul Farrow,
R-Pewaukee - to voice their concern with and opposition to the
Reilly said he had spoken expressed his concern to
Madison representatives on multiple occasions, adding there has been
talk that the changes could be made by the Joint Finance Committee
at the last minute in the budget process.
Similar legislation was introduced in the previous
two legislative sessions, but was unsuccessful. Now the Wisconsin
Hotel & Lodging Association is attempting to attach the proposed
changes to the upcoming state budget through the Joint Finance
Committee - eliminating the possibility of public comment or
discussion - according to Brookfield Mayor Steve Ponto.
“This was sprung on members of Joint Finance - our
representative found out about it on (last) Wednesday when it was
coming up the next day,” Ponto said. “So if members of the Joint
Finance Committee don’t know it is coming until a few hours before,
how is the public supposed to know what is going on and be able to
comment on it?”
On Tuesday, the Brookfield Common Council unanimously
approved a resolution expressing its opposition to the room tax
Ponto said the changes would constitute a non-fiscal
policy matter, which does not belong in the state budget.
There are 13 hotels in the city and Town of
Brookfield, which combine to make up the third largest concentration
of hotel rooms in the Metro Milwaukee area behind downtown Milwaukee
and the General Mitchell International Airport area.
Ponto said the city would lose an estimated $400,000
if the changes go through. In 2015, it’s estimated the city would
take in $2.5 million from room tax revenue collections and 75
percent of those collections - about $1,903,000 - would go to
general fund purposes. That total would be reduced if the changes
“It has a big impact on the city and town of
Brookfield,” Ponto said. “It has a substantial impact on the city of
New Berlin, it has a substantial impact on the city of Waukesha.”