New Suffolk County taxes target motels, cell phones

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The Suffolk County Legislature is considering increasing county taxes on hotel and motel stays, and imposing a new tax on cell phone use in an effort to increase revenue.

The measure would raise the county tax on daily hotel and motel stays from 0.75-percent to 3 percent, bringing in an estimated $5.4 million in added revenue per year, according to Dan Aug, a spokesman for Suffolk County Executive Steve Levy. Lawmakers are also considering a 30-cent tax that would be collected in monthly cell phone bills to help fund municipal 911 services. The cell phone tax would raise an estimated $4 million per year, Mr. Aug said.

The legislature is expected to vote on both taxing initiatives at its next meeting on Tuesday, August 4. If approved, the taxes would take effect next year.

The Suffolk County Legislature was granted permission by the State Legislature to levy the taxes, after separate home rule messages sponsored in May by Presiding Officer William Lindsay requested the taxes. The State Assembly approved the taxes on July 9, following State Senate approval in June. Governor David Paterson has signed off on the measures.

Mr. Lindsay, a Democrat, said the hotel and motel tax would help fund county parks, cultural institutions, such as the financially troubled Vanderbilt Museum in Centerport, and help cover a budget gap caused by a continuing decline in sales tax revenue as a result of the economic recession. About 35 percent of the revenue generated by the hotel and motel tax would be placed in the county’s general fund, while about 65 percent would go toward promoting tourism, parks and cultural institutions.

“With the economic downturn, which is the worst that the county has ever seen, some of the things that are falling off the table are the protection of our cultural arts and museums,” Mr. Lindsay said. “This tax will certainly go a long way to stabilizing them.”

Responding to concerns raised by 1st District County Legislator Edward P. Romaine and 2nd District Legislator Jay Schneiderman about a possible negative impact the motel and hotel tax would have on the East End tourist industry, Mr. Aug predicted that the tax would not deter tourists from visiting the North and South forks.

“We feel that the revenue will be spread around fairly and equitably,” Mr. Aug said. “Nassau County has had a 3-percent fee for motel and hotel stays for a period of time now, and we are hopeful that there will be no negative impact on that industry.”

Nonetheless, Mr. Romaine, a Republican who is opposed to both proposed taxes, said his office has been inundated with calls from the hotel industry representatives concerned about the new tax.

“Many of the East End hotels and motels are suffering from the economic downturn and the loss of revenue and now we are hitting them again,” Mr. Romaine said. “While I understand the bottom line of the county is suffering, how much are we going to be nickel-and-diming people?”

Mr. Romaine also questioned an assertion by Mr. Lindsay that the added revenue would further the tourism industry in the county.

“It’s further going to depress industry out on the East End,” Mr. Romaine said. “They’re going to have to lower their rates because of this tax.”

Mr. Schneiderman, an Independence Party member who is a co-owner of the Breakers Hotel in Montauk, said he is also opposed to the hotel and motel tax. The legislator is waiting for a decision from the county’s ethics board as to whether he can cast a vote on the initiative.

“I feel that it will hurt the economy,” Mr. Schneiderman said. “It will make hotels less competitive to other areas.”

Still, Mr. Schneiderman said he favored the 30-cent tax on cell phones to keep the county 911 system running. There is currently a 30-cent tax on regular telephone service, but revenue from that tax has declined as more and more people switch to cell phones, Mr. Schneiderman said.

According to Mr. Aug, there are 12 emergency 911 call centers in Suffolk County.

“If people are going to migrate from land lines to cell phones, then we need to migrate the tax,” Mr. Schneiderman said.

Third District County Legislator Kate Browning, a Working Families Party member, said she supports both taxing initiatives and predicted that the legislature will approve both on August 4.

She said Suffolk County residents will not be significantly impacted by the hotel and motel tax. “These are visitors in the county who are going to be paying that [tax], not Suffolk County residents,” Ms. Browning said. “It’s not going to hurt hotel profits.”

Ms. Browning said her office has received many calls from fire district officials asking her to support the cell phone tax.