La Crosse Mayor Tim Kabat plans to move forward with a proposal to increase the hotel room tax, despite a history of year-over-year increase in tax revenue at the current rate.
In a report provided by city of La Crosse Finance Director Valerie Fenske, the amount of tax revenue reported in 2018 exceeded $2.6 million, compared with $1.6 million in 2014.
The rise in room tax revenue can be attributed to hotel construction in 2016 and 2017, while the 2018 increase can be attributed to higher occupancy rates, Fenske said.
Mayor Tim Kabat plans to introduce a proposal to increase the rate to the common council in May, though he may not go the 50 percent increase he previously suggested.
A 50 percent increase would make La Crosse’s room tax rate the highest in the state by two percentage points, which would stand out to meeting and event planners as they build budgets and look for places to hold conventions and other events. That could hurt the area’s competitiveness as area organizations work to bring visitors to the La Crosse Center and other city amenities, according to a report by Tribune reporter Jourdan Vian in January.
“I’ve gotten pushback for my proposal for 12 percent, so that’s probably going to be a challenge to get that adopted by the council, but I am still going to be moving forward with an increase above the [current] 8 percent,” Kabat said.
The additional revenue from the potential room tax increase would go toward the cost of renovating the La Crosse Center. Without an increase, the city may have to cut into the budgets for other city programs or increase property taxes to pay for the renovation, according to Kabat.
“There are going to be very serious financial challenges,” Kabat said.
The current 8 percent room tax is currently divided between La Crosse Center operation costs, the Convention and Visitor Bureau, and the city, and the full amount of the revenue raised above that 8 percent would go toward debt service payments on the La Crosse Center renovation.
The final decision on a room tax increase would be up to the city council.
City of La Crosse room tax revenue