In 2004 Rutherford, East Rutherford, Carlstadt, and Lyndhurst started collecting a 3-percent occupancy tax on hotel and motel rooms. The 2003 legislation that allowed the towns to do so had no provisions on how to spend the money. Travel industry experts, however, believe that the money collected should go back into promoting tourism for the towns.
Joe Simonetta, president of the Travel Industry Association and the New Jersey Hotel and Lodging Association, said that municipalities statewide aren’t using the tax collected for promotion.
"A lot of the municipalities are using it for general purpose," Simonetta said. "It’s just revenue to them."
Simonetta believes that since the tax is collected from tourism, it should go back into tourism.
"They should be plowing it into what will help the town become a destination," Simonetta said, adding that if guests have to pay more on their bill but aren’t courted to stay in the town, they will find other arrangements.
"If they’re just going to make the hotels more expensive, the patrons are going to go elsewhere," Simonetta said.
In the 2007 fiscal year, Rutherford received $278,755, Carlstadt received $238,468, Lyndhurst received $330,830 and East Rutherford, with five hotels, received the most at $604,887.
Tom Bell with the Department of Treasury said that the legislation did not stipulate where the tax had to go and that currently no legislation is in the works to change that.
"This was enacted to supplement state aid," Bell said. "It’s for discretionary use."
Robert Weeks, the general manager of the 427-room Sheraton Meadowlands Hotel and Conference Center in East Rutherford, believes that some of the municipal occupancy tax should go back to promote tourism.
"I think that some of the money instead of going to the local towns should go to some of the organizations that promote tourism in the area so it ends up getting more tax revenue for everybody," Weeks said. "The Meadowlands being an interesting destination, it certainly needs promotion."
Joseph Crifasi, council president of Carlstadt, agrees that promotion is needed but contends that every dollar collected from the occupancy tax is well spent in servicing the three hotels in town.
"The revenue itself goes to the general fund, but indirectly it goes to the services around the hotel," Crifasi said.
Crifasi said that with hotels come many false fire alarms, police calls and ambulance calls, which drains the borough.
"Dollar for dollar they are definitely getting their money’s worth," Crifasi said.
He is open to the idea, however, of starting a hotel-community committee to help in finding affordable ways to promote the businesses.
Rutherford Mayor John Hipp echoed that sentiment.
"It enables us to provide services that they benefit from without draining the taxpayers of Rutherford," Hipp said.
Hipp, who is still waiting for a portion of the ‘07 occupancy tax which is distributed by the state, does not believe it is the borough’s responsibility to go back and promote the hotels or other attractions.
"I don’t want to put one dime into marketing the New Jersey Sports and Exposition Authority," Hipp said.
East Rutherford Mayor James Cassella also believes that the money should be spent at the borough’s discretion.
"Tourism is done by the state, and used to promote the state as a whole," Cassella said.
Cassella also said that with Xanadu coming, the borough would not be able to enhance promotion anymore than what Xanadu will spend on getting tourists to the area.
Along with the municipality hotel occupancy tax, a statewide occupancy tax was enacted which now stands at 5 percent. This tax is in addition to the state’s 7-percent sales tax. According to Bell, the state will take in $90 million in the upcoming year. Eleven percent of that will go towards promotion and advertising while the largest chunk, 63 percent, will go towards the state’s general fund.
All of these taxes have area hotels unhappy and struggling.
"First we were hit with 9/11 and then we were hit with these taxes in 2004," Denise Murray, owner of the Lyndhurst Quality Inn said. "The affordability of coming to New Jersey was the allure. We lost our allure."
Murray said that any advertising she sees by the state is for the shore and that the area is left to promote itself.
"I’m not saying every dime should be put into tourism but you need to advertise and promote," Simonetta said.
Although Simonetta would love to see legislation to mandate some of the revenue go to promotion, he acknowledged that it was not feasible in today’s economic climate.
