Home Economy Newport seeks GA support to raise taxes, fees for tourists

Newport seeks GA support to raise taxes, fees for tourists

By

Christopher Allen

-

03/04/2024

flower_show_Sun-83-1 — THE 27th NEWPORT FLOWER SHOW at the Marble House last June was one of many events run by the Preservation Society of Newport County. A proposal requested by city officials to implement a 9% tax on ticket sales would apply to the organization. PBN FILE PHOTO/DAVID HANSEN

NEWPORT – The City Council recently approved several requests for enabling legislation from the General Assembly to allow the city to raise fees and taxes on its more than 4 million annual visitors. Two of the resolutions, introduced by first-term councilor Mark Aramli, passed during the Feb. 28 meeting. The first is a 2.5% increase

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NEWPORT – The City Council recently approved several requests for enabling legislation from the General Assembly to allow the city to raise fees and taxes on its more than 4 million annual visitors. Two of the resolutions, introduced by first-term councilor Mark Aramli, passed during the Feb. 28 meeting. The first is a 2.5% increase to the 13% hotel tax; another would add a 9% surcharge on "high impact" admission tickets that would only apply to organizations with more than 100,000 ticket sales annually. Aramli's proposals state all revenue collected would be earmarked specifically for public infrastructure, resiliency, and public safety funding, citing the more than $500 million in unfunded infrastructure projects the city plans to complete within the next five years. A separate resolution approved by the council on Feb. 15 through a request by the city's finance department would allow Newport to raise landing fees levied on cruise ship passengers. During the Feb. 28 meeting, Aramli said the hotel tax would provide the city an additional $3.5 million in revenue, a significant help toward what he described as a “dire financial situation” facing the city's infrastructure and environmental resiliency needs. “Newport should be governing for the locals first,” he said. “We cannot even afford at this time to borrow the money we need. I want to tax the tourists and not the locals.” Generating an estimated $3.6 million annually, Aramli argued the hotel tax hike would equate to a $10 nightly increase for a $400 room, which pales compared to the 36% spike in hotel room rates the city has experienced over the previous three years, according to the HVS Hotel Intelligence Report. While approximately 83% of the city’s general fund is supported through local taxes, meals, beverage and hotel taxes only comprise about 6.5% of revenue. Aramli seeks to change that, arguing the change would only put Newport in line with other destination cities, such as Boston, which charges 17% on nightly hotel stays. “We appreciate the money they spend in our city. They're part of the livelihood of many businesses here,” he said. “But they don’t live here. And this resolution is all about getting more cash out of those folks.” The move to increase cruise ship charges is in response to the growing costs in public safety and security funds to handle the harbor traffic. Newport now collects $6 per passenger, a rate that has been in effect since the last time it was updated in 2014, according to city spokesperson Thomas Shevlin. Shevlin said there were 98 cruise ships scheduled to visit Newport Harbor last year, though some were cancelled due to weather. Newport generated $409,600 in cruise ship fees in the summer of 2019, a number which has grown to approximately $450,000 in 2023. According to Discover Newport spokesperson Cassandra Earle, in 2023 the city welcomed 85,000 cruise ship passengers. And city officials said during a recent budget meeting they expect more than 100,000 passengers this year. The most controversial proposal was the admissions tax which some councilors, including David Carlin and Jeanne Marie-Napolitano, oppose because it would only seem to apply to the Preservation Society of Newport County, though no citywide analysis has been conducted. “Whenever we impose additional taxes...it does have an effect on institution and the employees of the institution, many of whom are Newport residents,” said Carlin. Napolitano worried about the optics of adding a tax that is seen to target a single organization. “I have a problem with that,” she said. Christopher Allen is a PBN staff writer. You may contact him at Allen@PBN.com