Rhinelander chamber and city disagree on room tax allocation
By Lori Adler
At the Nov. 25 meeting of the Rhinelander common council, the 2020 budget was approved. By law the city had made the proposed budget available to the public 10 days prior to the meeting. Seeing the posted budget was the first time Lauren Sackett, director of the Rhinelander Chamber of Commerce, saw the change in the allocation of the room tax, a change which significantly impacts many other budgets, including that of the chamber.
The room tax was put in place in the early 1990’s as a way to collect a little money from area tourists, which would in turn be used to further enhance tourism efforts.
“The money we earn goes out to earn more money,” Sackett stated.
A zone that includes the city of Rhinelander as well as the town of Pelican was set up to collect the 5.5% tax on lodging. An agreement was made that the city, as collector of the tax, would keep 30% to use on tourism activities and would then forward 70% of the tax collected to the Rhinelander chamber, the fiscal agent of the Rhinelander Tourism and Marketing Committee. The agreement is in the form of a contract with the city, a city resolution and state law.
This year, however, the city allocated 45% of the tax for their own use in the 2020 budget, with plans to forward only 55% of the collected tax to the tourism committee. As the estimated total tax collected for 2019 is about $200,000, this amounts to a $40,000 change in what is being forwarded to the committee.
“We had our 2020 budget outlined with the 70% in terms of what we were going to be doing as marketing initiatives in 2020,” Sackett said. “Now we are kind of at a standstill until we can have that final dollar value and figure out what we’re doing to move forward, and what adjustments we’ll have to make should it not go back to the 30%.”
The tourism committee has some very specific uses for the room tax. Marketing initiatives and tourism promotion amount to 40%; the chamber keeps 17% for operation of the visitor center; 5% is set aside for grants to nonprofit organizations to promote tourism events; and 8% is designated to market things specific to the city of Rhinelander such as city parks and the golf course.
The 30% the city generally keeps is supposed to be used for things that are tourism related. Historically it has been used for the Pioneer Park Historical Complex, fireworks for 4th of July and lifeguards at Hodag Park. At this point, Sackett is unsure how the city is planning to use the remaining 15% they are keeping, though the money is designated for tourism activities.
“The main thing that we really truly feel is that we’re tourism professionals, that’s really a lot of what our job is here at the chamber and on the tourism committee. We truly feel that we are the best route in terms of understanding and managing tourism marketing,” Sackett said, adding, “To me, it doesn’t make sense to have a city government do that, that’s not exactly their forte. They might have some knowledge with it, but it doesn’t exactly make sense. We’re trying to convey a cohesive brand and cohesive messaging, and it does make it difficult when you have too many organizations trying to do the same thing.”
Sackett and members of the tourism committee have been meeting with city officials, and some proposed changes to the city’s room tax resolution are being considered by the common council. Sackett is hoping, however, that changes in the allocations of the room tax will be considered, which could be done with a budget amendment.
“We are hoping that we can come to an agreement,” Sackett said, “I don’t like that our organizations within the city are trying to fight about something like this. It’s really supposed to be a collaborative effort.”