People checking into a hotel or motel in East Ridge may see a slight increase in what they pay for a room after East Ridge City Council voted Thursday night to raise the hotel-motel tax from 2 percent to 4 percent.
Councilman Denny Manning was the only one of the five-member council who voted against the measure.
“Times are hard as it is right now,” said Manning, who added that the city’s property tax hike last year was already straining local businesses. “If we keep taxing and taxing them, we’re going to lose them.”
Gobble said the brunt of the tax increase won’t fall to hoteliers, but to those booking the rooms at the hotel.
“In the long run it will pass the local tax burden on tourists passing through,” he said. “And this helps keep property taxes low.”
Gobble estimates that the tax will net $130,000 for the city. There are no plans to raise the property tax rate in the 2013 budget, he said.
He added that the increase wouldn’t be significant enough to deter tourists from booking a room in East Ridge.
“At the end of the day if someone’s not staying at a hotel in East Ridge it’s not because of the hotel-motel tax,” Gobble said. “Ringgold Road has one of the highest trafficked roads in the state, and we are located right off the interstate. If someone’s not staying at a hotel here, it’s because [the owner] has not kept it up, and not worked to made it look appealing.”
Bill Breneman, a sales representative for three hotels in East Ridge, disagreed, saying the measure shows a “lack of respect” for East Ridge businesses.
“It reduces the ability for East Ridge to have a competitive edge. When you take away the competitive edge, you lose sales,” said Breneman, who said he’s used that as a selling point for large traveling groups. “Why else would someone choose to stay here over the city of Chattanooga?”
The increase will make East Ridge’s hotel tax rate equal to Chattanooga’s.
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