Lack of communication over room tax leads to misunderstanding

By Lori Adler

Reporter

NOTE: This story is updated with clarifying remarks from RTMC President Erin Skinner.

At the Nov. 25  meeting of the Rhinelander common council, there was discussion over the room tax item on the 2020 budget which resulted in a misunderstanding by the Rhinelander chamber of commerce and Rhinelander Tourism and Marketing Committee (RTMC)  members.

The line item on the budget showed a $200,000 income coming from room tax, a special tax which is collected from hotel stays within the city of Rhinelander. Lauren Sackett, chamber director, confronted the council during the meeting to question the percentage of those monies that was being kept by the city. Per state statute, city resolution and contract, the city is only supposed to keep 30% of the room tax dollars and forward the remaining 70% to the chamber who acts on behalf of the RTMC. The 2020 budget, however, appeared to show the city keeping 45% of the room tax income.

No council member present at the Nov. 25 meeting commented on Sackett’s remarks, and neither did city administrator Daniel Guild nor Mayor Chris Frederickson. Sackett and the tourism committee were upset at the prospect of losing income they had already counted upon and were concerned about their own budgets and plans for future marketing initiatives.

Eventually, it became clear there was a misunderstanding. The line item for room tax on the city’s 2020 budget showed a total of $200,000, but the income was actually only $170,000 for the year with the other $30,000 coming from a balance in that fund from the previous year. Therefore, the amount being forwarded to the chamber was in line with the statute.

“This could have been communicated to us prior to the Nov. 25 council meeting or during the council meeting,” Sackett said. “But it was not.”

RTMC President Erin Skinner commented on the Star Journal Facebook page, saying the misunderstanding was not Sackett's mistake.

"She specifically asked for clarification and even mentioned that the city had a fund balance available to use," Skinner wrote. "Mr. Guild had ample opportunity to explain that the additional funds would be coming from there, but chose not to.

"One simple sentence could have saved a lot of negative attention to the city," she continued. "In addition, Lauren and I reached out directly to the city prior to the meeting and did not receive an explanation of the budget."

Room tax funds are used by the chamber for marketing and tourism initiatives including advertising, grants for nonprofit events and operating the visitor center.