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Hoteliers irked by tax hike proposal

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Posted: Sunday, February 11, 2007 12:00 pm | Updated: 4:53 pm, Wed Aug 15, 2012.

By Justin Cox

Killeen Daily Herald

With the possibility of an increase in the county's hotel tax rate to help pay for an expansion to the Bell County Expo Center, Killeen hotel owners are dubious of the proposal's avowed benefits.

Expo Center representatives are hoping to pay for a 30,000-square-foot equestrian arena addition in such a way that taxpayers are not tapped with the additional costs. In order to accomplish that, they are proposing a 1 to 3 percent increase in the hotel/motel tax.

Jimmy Park, manager of Best Value Inn in Killeen, believes that the size of Killeen is not conducive to a hotel tax rate hike.

"I don't think it will work," Park said. "They might make some money on the tax, but they're going to lose some customers. The people will come in and see the prices, then just go somewhere else."

Temple, Belton and Killeen have a 13 percent hotel tax. Seven percent of that tax goes to the cities and 6 percent goes to the state. If the state should approve a 3 percent tax increase, the Expo Center's fund would receive the increased tax revenue.

Park said the hotel tax rate in most major cities is 11 percent. A bigger city might be able to handle it, but not one the size of Killeen, he said.

"It's not a good idea – 13 percent is already high," Park said. "If they need more budget to build the Expo Center, they're going to have to find another way."

Park said the hotels in Killeen don't get that much business from the conventions at the Expo Center because it's 30 minutes away.

"It only benefits Belton and Temple," Park said. "It's a good deal for them, but not for us in Killeen. It's a special situation here."

Bobby Madayag owns the Hallmark Inn and Suites in Killeen, and he is not in favor of the tax either.

"For me as a traveler, I'm not going too far. They (the Belton and Temple hotels) will be the ones taking advantage of that," he said. "I'm not wasting gas to go to Killeen."

Madayag said the hotels in the area are already suffering because of troop deployments, and this tax increase would only further hinder the progress of area hotels.

"They don't actually know the market," Madayag said of the Expo Center officials. "The big impact was three years ago when the troops started to leave. The hotel suffers when troops are deployed. The families don't come here that often anymore. They need to come up with another solution."

City Manager Connie Green said he understands the hotel owners' concerns.

"I'm sure that the hotel industry is adamantly opposed to it, and I understand their reasoning there, because they're directly impacted by that," Green said. "I think our council has taken a serious look at it. I haven't seen a council resolution supporting it."

Green said he'd rather see some of the money invested in Killeen, so that all the major cities in Bell County can benefit.

"If there had to be a tax, I'd prefer to see a direct benefit here in Killeen," he said. "A capital improvement project that would be eligible from a hotel occupancy tax."

That way, he said, the money could be reinvested in Killeen rather than seeing the only benefits away from the city.

In other nearby cities that have made similar improvements to tourist facilities, Salado has the lowest hotel tax rate at 10 percent, while Austin, Abilene and Fort Worth are at 15 percent. Waco and Georgetown are at 13 percent.

The tax increase proposal will be sent to the state Legislature, not the cities, for approval, but Bell County Commissioner John Fisher said he wanted to gauge the reaction from city officials in the county and get their input, since the proposal will be sent to the floor on their behalf.

At a Killeen Workshop Tuesday, the Expo Center's board president said the upgrade would improve revenues for all the cities, not just Temple and Belton.

"When you look at Killeen and the explosion of hotels and motels, this is one thing where the money going in it goes directly to quality of life," Jacobs said. "What's good for the Expo Center is good for the cities of Killeen, Belton and Temple."

Several Killeen city councilmen said they still need to look at all the information available, but so far, they generally like what they see.

"Basically, I'm in favor of it," Councilman Larry Cole said. "I am concerned about the competition with the general public and the independent investors at the RV Park. I don't have any problem with the county implementing the tax as long as it will not interfere with our occupancy rates."

Councilman Dick Young said the expansion is needed.

"They need the expansion. I was a little concerned about the 300 RV spots," Young said. "That could be some lost hotel/motel revenue that the city may lose, but the county may get.

"I still need to look at the data, but I think it looks like a viable project. I think between the cities and the county, we'll be able to come up with something."

Contact Justin Cox at jcox@kdhnews.com or call (254) 501-7568

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