The proposed lodging tax — good deal or not?

The South West Metro Chamber of Commerce is proposing a three percent lodging tax to promote tourism funding for Chaska.  The funds would be funneled (less a 5% administrative fee that goes to the city) to the Chamber for tourism promotion.  So, on a $100 hotel bill, the chamber would received $2.85 and the City of Chaska would get $0.15.  Many other cities, including Shakopee and Bloomington, have similar arrangements.

Chaska would be the first city in the Chamber’s jurisdiction to have such a tax.  An effort to institute such a tax went nowhere in Chanhassen three years ago.  The proposed tax will be discussed as the Feb. 23 City Council meeting.  Here are the key points the city should insist on before instituting such a tax:

  1. All of the impacted businesses should be on board with the plan.  The four hotels in the city — The Peacock Inn, the Super 8 Motel, the Best Western  Chaska River Inn and Oak Ridge Conference Center — should sign-off on the tax.
  2. The Chamber should provide a detailed plan of what they intend to do with the money.  Key to this proposal is that the revenue raised by it should be used to benefit Chaska, and not the other cities in the SW Metro Chamber.
  3. The Chamber should provide a detailed plan of how they intend to measure the results from the tax.  How do they intend to demonstrate that the tax is providing the benefits the Chamber claims can be gained from instituting the tax?

If the Chamber cannot provide adequate responses to these three points, the City Council should not adopt the lodging tax.


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