The budget that Gov. Bev Perdue will either sign or veto is Exhibit A that the Republicans in the General Assembly are adamant in their campaign pledge to cut taxes. Despite enormous and growing pressure, they have decided to allow a single-cent sales tax to expire that would generate $1.3 billion during the next fiscal year — enough money and more to satisfy educational leaders in this state who are now forecasting Armageddon.
But the House this week signed off on a bill that doubles the hotel tax in St. Pauls and Lumberton from 3 percent to 6 percent, granting the requests from town boards in those municipalities. The bill now moves to the Senate, where it is likely to be approved. Some might be surprised by the House’s approval of any tax hike, but the General Assembly has a long tradition of honoring such requests as lawmakers are reticent to inject themselves into local debates. They understand the day may come when their local bill needs support.
But not everyone locally is happy.
Local hotel owners a few months ago showed up at Lumberton City Council to protest the proposal to raise the tax, saying the extra $3 on a $100 hotel room can keep some motorists in their cars, looking for cheaper lodging. They say the tax increase will strip them of a competitive advantage over hotels north and south on Interstate 95, in Fayetteville and Florence, S.C., where the tax is already 6 percent. They say every little bit matters when a dour economy has tourists looking for ways to stretch their dollars.
They say, with other things being equal, travelers will give the nod to Fayetteville and Florence, which boast better shopping and more fun opportunities than does Robeson County.
Municipal officials say the extra revenue is needed to help attract tourists. In St. Pauls, that effort is limited primarily to keeping exit 31 manicured, but in Lumberton the money funds the Lumberton Tourism Authority Board, which markets the city and supports events that travelers might enjoy. They say that money helps attract visitors to the town who need lodging, but also shop, eat at local restaurants, and help fuel what is now the county’s No. 1 private industry, tourism.
We don’t have the formula to determine if the local hotels would have a more robust bottom line with or without the tax increase, and the next person’s guess is probably as good or better than our own. But tourism is now the No. 1 private industry in Lumberton, bringing in well past $100 million a year, so something on the local level is working.
We would be wise to continue efforts to grow that figure, and not sit by idly with our fingers crossed.