ELLSWORTH – One of the immediate ways Maine could reform its tax structure and start alleviating the tax burden away from property owners is to raise the state lodging tax from 7 cents on every dollar to 10 cents, members of the League of Women Voters were told Saturday.

Alan Caron, president and CEO of GrowSmart Maine in Yarmouth, talked about the issue as he spoke to about 50 members of the nonpartisan voters’ group at Ellsworth City Hall.

The recommendation was included in a report, drafted and released last year by GrowSmart Maine and the Brookings Institution, because Maine’s lodging tax is lower than in other states and raising it would help generate more tax revenue from nonresidents, Caron said.

“Maine really is a cheap date and it’s killing Maine taxpayers,” Caron said. “It costs us a lot of money to host tourists.”

The concept of increasing the lodging tax is not getting a warm welcome from business leaders in Maine’s tourism industry, however.

The Maine Hospitality and Tourism Alliance released a statement last week opposing any kind of increase in Maine’s lodging tax. The statement was released in an e-mail from Ted O’Meara of Pierce Atwood Consulting in Portland.

“A lodging tax increase will hurt Maine people, Maine business owners and Maine’s tourism economy,” the statement read. “Our hospitality businesses also must contend with distance from markets, unpredictable weather and the state’s relatively modest promotion budget. A lodging tax increase will make it that much harder for our members to be successful in Maine.”

Caron, however, dismissed this type of argument Saturday. He said the study simply looked at what other states charge, both in and out of New England. Maine’s 7 percent lodging tax is the second-lowest in New England, after Massachusetts, he said, and 70 percent of the tax in Maine is paid by people from out of state.

The only example researchers could find nationwide of a lodging tax having a negative effect on tourism was when New York City had a rate close to 20 percent in the 1990s, he said.

“How many lighthouses do they have in Vermont?” Caron asked to make his point. “It just doesn’t pass the straight-face test. We’re afraid to charge people what the market will bear.”

Caron’s argument seems to be catching on in Bar Harbor, where the Town Council is exploring the possibility of lobbying the Legislature to allow municipalities to enact local option taxes.

In a scenario envisioned by Bar Harbor officials, an additional 2 percent local option tax on local lodging and meals could result in $2 million more tax revenue for the town each year. Money raised by the local tax would be used by Bar Harbor to fund infrastructure projects, relieve local property taxes and for marketing.

At a breakfast forum last week, Bar Harbor Councilor Jeff Dobbs dismissed the notion that tourists will be scared off by a 2 percent increase in lodging and meal taxes. Such taxes don’t affect his decisions when he travels, he said.

“I’ll go back to that place again because that place is where I want to go,” Dobbs said.

Caron said Saturday that researchers considered local option taxes but did not come up with a recommendation about them when drafting the report for the Brookings Institution and GrowSmart Maine.

He said the report suggests the state could allow local option taxes as a way to reward towns that work with their neighbors to reduce government spending and administration.

Simply raising the lodging tax is but a small part of how Maine’s tax woes should be addressed, Caron acknowledged. Maine’s income tax rates should be adjusted at both the high and low ends of the scale, he said.

“It’s an issue of fairness,” he said. “People making $18,000 a year should not be paying 8.5 percent of their income to the state.”

Maine’s property tax structure is in need of the most adjustment, according to Caron. Because property taxes are so high, he said, it is affecting how the state is being developed.

Property development through subdivisions or the construction of large, national big-box stores is viewed by many as a way to alleviate the tax burden on existing homeowners because these developments generate a relatively high amount of property tax revenue, he said.

As a result, towns compete against each other for attracting these types of developments, which reinforces the tendency in Maine of each town seeking solutions on its own rather than trying to coordinate with its neighbors.

“It absolutely forces these towns to compete and not think regionally,” Caron said. “You can’t fix these problems one town at a time.”

The report is meant to suggest ways of planning for Maine’s economic future without adversely affecting the state’s rural, small-town way of life.

The League of Women Voters has two more forums on the report planned for Feb. 17 and March 24 at Ellsworth City Hall.