Shawano looking at room tax hike

SHAWANO — City officials are contemplating an increase in the hotel and motel room tax aimed at generating more revenue to finance community events, particularly the Thursday night events at Franklin Park that were inaugurated this year.

Letters went out this week to hotel and motel operators informing them that the city was considering the idea, though it won’t be taken up by the Common Council until next month’s meeting.

City staff is recommending that room taxes be increased from the current 4.5% to 6% starting the first of the year.

That would mean an estimated increase in revenue for the city of about $10,000 per year and a $20,000 increase for the Shawano Country Chamber of Commerce, according to City Administrator Eddie Sheppard.

State statutes require those revenues to be used for tourism-related events and event promotion.

The city and the chamber earlier this year agreed on a new split of room tax revenue, with the city retaining 30% and the chamber keeping 68%.

Hotels and motels collecting the tax get the remaining 2%.

The new room tax split generated about $20,000 for the city this year.

“We’re hoping to grow that to about $30,000,” Sheppard said.

Sheppard said the Thursday night events at Franklin Park have been very successful.

“The want to do even more is based on how positive the response was,” he said. “It’s something that caught on so quickly and we did so well, we want to continue the momentum.”

The expected revenue increase is currently being worked into the city’s proposed 2020 budget, though that would change if the council doesn’t give its approval.

“We’re moving forward as we build our budget on the basis that this will be approved,” Sheppard said. “If for some reason it doesn’t move forward, then we’ll have to make up for that through the general fund, through the levy.”

Whether it comes from an increase in room taxes or the general fund, the city is already committing money to booking entertainment for Franklin Park events.

“We have to move forward to book our acts,” Sheppard said. “We’ve got to do that now. One way or the other, it’s got to be paid for.”

Sheppard said the city also wants to bring in consistent high quality entertainment for the park.

“We’ve had some ebbs and flows on quality,” he said. “We’d like to keep that kind of higher.”

Sheppard said the city also wants to ensure a consistent lineup of vendors.

“That was one thing we heard,” he said. “They’d have events where they had vendors and it was great, and then they’d have events where we didn’t pay for vendors to come and provide food or anything and people would want that.”

The additional revenue is also intended to help bolster other community events, such as ShawanoFest and the Holiday Stroll.

The maximum accommodation tax that can be collected under state law is 8%.

Chamber Tourism Manager Patti Peterson said the current 4.5% is much lower than what’s charged in surrounding areas.

“A lot of areas are much high than we are in this region,” she said. “We’re not nearly as high as a lot of areas are.”