Lodging tax hike will hurt Maine

“For every problem, there is a solution that is simple, neat, and wrong” is the famous quote from the late journalist and social critic H.L. Mencken

I can’t think of a better way to describe GrowSmart Maine’s call for an increase in Maine’s lodging tax. It sounds simple and neat, but it is neither, and, as usual, Maine people will be the ones to get hurt.

For weeks now we have heard about the Brookings Report and how it is going to save Maine. And while there surely are some worthwhile ideas in the report, raising the lodging tax is not one of them.

Given the importance of tourism to Maine’s economy, you might think that the Brookings folks sought out the opinions of those who are actually in the hospitality business here in Maine, but that was not the case. Instead, they ridicule us as a “cheap date” and see our customers as a way to bankroll a $200 million bond to fund their “Quality Places Fund and buy more state land.”

No group in Maine is doing more already to provide access to Maine’s quality places than our hotels, motels, inns, lodges, B&Bs, restaurants, campgrounds, sporting camps and ski areas. Maine’s tourism and hospitality businesses are mostly small and locally owned by hardworking people who invest in the state and provide access to our coast, lakes, mountains and forests for millions of Maine residents and visitors.

There are many challenges to running a tourism business in Maine: high costs, high taxes, excessive regulation, distance from markets, unpredictable weather, and intense competition from other states and destinations. We work hard in this business to give our guests a good experience and good value for their dollars. We all promote Maine, employ Maine people, and collectively contribute billions of dollars to the Maine economy.

For that, the leader of GrowSmart Maine has the nerve to say things like “Maine really is a cheap date and it’s killing Maine taxpayers” and “It costs us a lot of money to host tourists.” What an insulting and condescending way to dismiss an industry and a group of people that make such a huge contribution to Maine’s economic vitality and quality of life.

First of all, we are not a cheap place to visit compared to other locations. The proposed increase will give us a higher lodging tax than New Hampshire, Vermont, upstate New York and many other places that we compete with for vacation dollars. Maine is the only New England state that taxes overnight stays at campgrounds. New Hampshire has no sales tax, and that’s certainly not lost on vacationers who also spend a lot of time in our shops and stores.

It is also worth noting that most of the places with higher lodging taxes than Maine are popular destinations for business travelers, but business travel is less than 10 percent of Maine’s hospitality business. Second, it’s pretty obvious to anyone who lives and works here that what’s killing Maine taxpayers is government spending, not taxes that are too low.

Third, the statement that it’s costing us a lot of money to host tourists implies that tourism is a net loser for Maine. Quite the contrary, Maine reaps enormous benefits from being Vacationland, far in excess of the modest amount the state spends promoting tourism. How many other industries in Maine are responsible for $3.8 billion in payroll, $531 million in tax revenue, and 176,600 direct and indirect jobs?

Finally, supporters of the proposed lodging tax increase love to make it sound like a higher lodging tax will be painless because people from out of state will pay for it.

While it’s true that in the aggregate 70 percent of the lodging tax is paid for by visitors, that simply is not the case for many hospitality businesses around the state. At many properties, especially those farther from the coast, and during certain seasons of the year, the majority of the lodging tax is paid for by Maine people – people who are already paying among the highest taxes in the country.

A higher lodging tax may sound simple, neat and painless, but all taxes have consequences and it is Maine people who will pay the price for this one. We always do.

Jim Littlefield is the owner of the Oakland House Seaside Resort in Brooksville.