NASHVILLE - A bill to increase Bradley County's hotel-motel tax from 5 percent to 7 percent moved through its first House panel Wednesday despite opposition from local hoteliers and the Tennessee Hospitality and Tourism Association.
Local Government Subcommittee members approved the bill, amending the existing private act for Bradley County on a voice vote and allowing it to move on to the full committee.
Most of the revenue raised from the 2-cent hike would go toward the county's portion of debt service on an anticipated bond issue for a proposed new $6 million industrial park off Interstate 75 at Exit 20 near Cleveland.
Bradley County government and Cleveland city government each are putting $3 million each into the project. It would include a hotel.
Bill sponsor Rep. Dan Howell, R-Cleveland, described the measure as a "job creation bill." The Cleveland/Bradley County Chamber of Commerce projects the development will attract new businesses and generate an estimated 2,000 new jobs locally, Howell said.
Without the hospitality tax increase, Howell said, the project could be delayed as long as five years. The Tennessee Department of Transportation is already spending some $23 million to revamp Exit 20, he said.
"I can't imagine anyone not voting for a project that would create 2,000 jobs," Howell said.
The increased amount still would be below Chattanooga's 9 percent tax, he said.
Dan Haskell of the Tennessee Hospitality and Tourism Association told the panel Bradley County hotels and motels are "100 percent opposed" to the increase. All the local hotels and motels are in Cleveland.
Haskell said hoteliers generally feel money raised from their customers should be re-invested in tourism-generating projects.
"You're spending money on an industrial park," Haskell said, later adding "this is a tax on one industry to benefit everyone else."
But speaking in support of the bill, Gary Farlow, CEO and president of the Cleveland/Bradley Chamber, said expenditures for the industrial park ultimately will benefit hotels and motels.
"There are tourists and there are visitors," Farlow said.
Cleveland and Bradley County don't get that many tourists, Farlow said. But they do get plenty of visitors to Lee University, the Cleveland-based world headquarters for the Church of God, as well as major companies, including manufacturers. Farlow said the purpose of the industrial park is to attract more manufacturers.
Sen. Todd Gardenhire, R-Chattanooga, is sponsoring the Senate companion bill, which recently was re-referred to the Calendar Committee.
Contact Andy Sher at asher@timesfreepress.com, 615-255-0550 or follow via twitter at AndySher1.