State aims to boost tourism budget

State lawmakers are considering whether to raise the cost of eating out and spending a night at a hotel as a way to beef up the budget to promote Utah and its tourist attractions.

Two bills that increase the tax on hotel rooms — one could be applied at the county level while another one, which would also tax restaurants, would be levied statewide — passed the Senate Revenue and Taxation Committee Tuesday.

Both bills are intended to significantly boost the budget for tourism advertising, as well as help fund sporting facilities, cultural projects and entertainment venues.

The money is needed because of a downward trend in tourist dollars, Sen. Peter Knudsen, R-Brigham City, said. Estimated at $14 million next year, the money would be used to improve Utah's image and to help better establish the state as an amateur sports capital.

"We have a beautiful state, and we have wonderful assets," Knudsen said. "Maybe it's our culture to not blow our horn, but we have to change."

As part of Knudsen's SB208, a 1/4 of a cent tax would be charged to prepared food throughout the state and a 1/2 of a cent would be charged to hotel room rentals. Most of the revenue would be deposited into the "Tourism Economic Stimulus Fund" for the "marketing and branding" of Utah, although an initial $500,000 would be given to amateur sports facilities.

That amount would annually increase or decrease at the same percentage of overall revenues.

While the statewide restaurant tax was maintained, a 1 percent increase in the Tourism, Recreation, Cultural and Convention (TRCC) tax for prepared food was removed from SB60, although sponsoring Sen. Michael Waddoups said after the meeting that he would try to put it back in on the Senate floor.

The amended bill would allow all counties to levy both the current 1 percent restaurant tax and a 1/2 of a cent tax on hotel rooms, something only Salt Lake County is currently allowed to impose.

"It's important that we stay competitive," Waddoups said. "We can't do that if we don't find ways to pay for infrastructure and to promote this state."

Both taxes were opposed by owners of neighborhood chains, local cafes, and fast food outlets, who said that the food taxes would primarily impact state residents and would hurt their businesses because of increased prices.

"The culture in Utah is the most price sensitive of anywhere I've ever dealt with," said Scott Slaymaker, who owns 24 franchises in the state. "You raise prices even a dime, and you will hear it."

The tax was supported, however, by representatives of the ski industry and high-end restaurants, who said that the small tax increase would mean big returns in the number of visitors to the state.

"More bodies means more sales, and it will mean more sales tax revenues for the counties and the state," said Bob Syrett, owner of the Bryce Canyon Lodge. "It's a win-win proposal."

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E-mail: jloftin@desnews.com