INDIANAPOLIS (WNDU) - The latest version of the Indiana state budget would lower a St. Joseph County tax that few St. Joseph County residents pay.
It is called the innkeepers' tax, and it’s a 6 percent levy on hotel room rentals -- a tax largely paid by out-of-towners.
The budget game plan is to take a tax revenue stream created to fund the now-defunct College Football Hall of Fame in South Bend and use it to build a regional sports tournament mecca in Mishawaka.
“Places like Grand Rapids or Fort Wayne or Chicago area or Indianapolis have beautiful amateur athletic facilities where they would host massive tournaments, whether it be for volleyball, basketball, baseball, soccer, you name it,” Mishawaka Mayor Dave Wood said. “We're kind of the whole in the doughnut. We don't have anything around here that brings those tournaments to our area.”
So, 1 percent of St. Joseph County’s 6 percent tax on hotel room rentals would be carved out and divided up in a 60-40 split between the sports complex project and the Potawatomi Zoo under language contained in the budget bill passed by the Indiana Senate Tuesday.
That formula would provide an estimated $540,000 a year to the sports complex and $360,000 to the zoo.
“[We're] primarily concerned just because we haven't had much conversation in the community about making those changes,” South Bend Regional Chamber of Commerce President and CEO Jeff Rea said. “Historically, the General Assembly has had communities come with a unified vision, a unified plan on how to make those kind of changes. They really want to see local support.”
Rea said the St. Joseph County Hotel-Motel Tax Board has already committed to funding the sports complex, but the zoo is a different animal.
“We're not against the zoo, we like the zoo, the zoo is an important local attraction. The zoo doesn't drive many hotel room nights, though, so to do a specific call-out for the zoo was concerning to us,” he said.
Furthermore, the current budget language would phase out the 1 percent carve-out in July of 2024 that would lower St. Joseph County’s innkeepers' tax rate.
“So, we're at 6 percent, Fort Wayne is at 7 percent, Evansville is 8 percent, Indianapolis is at 9 percent, so in the proposed scenario, we would go back to 5 percent," Rea said. "That's troubling to us as we try to compete for some of the same sports tournaments.”
Wood countered that Mishawaka now houses about 30 percent of all the hotel rooms in the county, yet “we never had a dedicated return on that.”
Wood said he feels the tax-lowering language can be changed between now and 2024.
“I think they would want to review it and make sure that the money they dedicated is being used for what it's supposed to be used for, and then hopefully reaffirm it at that point in time,” he said.
The budget bill passed the Senate Tuesday but still must be reconciled with the House-passed version with less than two weeks remaining in the session.