January 14, 2010

A bigger hotel tax to fund KRM? realracine objects

The Legislature has hit Dave Blank's hot button -- hard! -- by proposing that Racine County could fund the Regional Transit Authority with an additional 8 percent hotel room tax. On top of the 8% room tax we already have, which itself is on top of the 5.1% general sales tax. Adding up to a tax of 21.1%.

All to fund the RTA, and KRM commuter rail and better bus service.

The operative word here is "could." The Legislature also suggested three alternative funding methods for RTA: a wheel tax, a half-percent sales tax or a municipal membership fee.

Those three alternatives, of course, share a major flaw in legislators' and local officials' eyes: one way or another they impose a cost on local residents -- um, the voters they depend upon for re-election. Whereas a hotel tax, for the most part, takes the money from the pockets of business travellers -- visitors who do not vote in local elections. (See, tax, rental cars, for more on this approach.)

Maybe for that reason, all Blank sees is the hotel tax, which, if imposed, would raise Racine County's hotel tax to 21.1 percent, highest in the country. Blank, CEO of the Racine County Convention and Visitors Bureau -- now known by its new lower case moniker, realracine -- points out that the hotel tax proposal, if adopted, "would hurt our chances to attract more visitors." Even without an additional tax, county room rentals were down in 4% in 2009.

realracine's newsletter notes that a 21.1% hotel tax would add $7 more (on a room costing $100) to the bill than a room in, say, Milwaukee or Lake Geneva. "The Board of Directors of realracine opposes the inclusion of the hotel room tax to help fund the RTA. We do not want to slam the hotel door on business travelers and tourists who can find lodging in Lake Geneva, Milwaukee County or Lake County, Illinois, at 7 per cent less! We need people, for business and pleasure, to come to Racine County, spend money visiting and enjoying our county, including staying in our hotels and motels."

The existing 8% hotel tax primarily funds the RCCVB... um, realracine, whose mission is to attract more visitors "who spend money throughout the community and therefore replenish the fund," realracine says. "Funding mass transit will not do this."

Ouch! It's that last statement, I think, that gets RTA proponents' knickers in a knot, although as we all know, money is the root of most disputes. (And realracine supports KRM, so go figger.)

State Sen. John Lehman told the Journal Times that Blank is over-reacting. And Kerry Thomas, executive director of Transit Now, pointed out that the choice of which alternative to impose is up to local decision-makers. The sales tax would require a referendum; the others could be enacted by local government.

Blank told us, "We would prefer not to see a room tax as an option at all. In the grand scheme of things it can only be a small part of the funding." Neither legislators nor Transit Now should have been surprised by realracine's position: tourism officials, who have been following the proposal since October, told them of their opposition early in December.

One statement in the JT's story really caught my eye. "Lehman pointed out that Racine County could raise more than enough for an RTA and commuter rail by using a tool it already has: the right to add a 0.5 percent sales tax."

WHAAA??? Wasn't Lehman the lawmaker who most forcefully opposed a county sales tax this summer, when the Legislature's Joint Finance Committee, on which he is the ranking Democrat, was trying to fund the RTA, finally coming up with a $16 car rental tax? Yes. See here. Didn't help that that deal was a middle-of-the-night compromise ... much like the middle-of-the-night sell-out giveaway that saddled Racine County with a piece of the stadium tax forever, costing George Petak the very same Senate seat that Lehman now occupies.

Just for reference-sake, here are the room taxes imposed by other communities, as supplied by realracine:
Kenosha County 21.5% (proposed) -ouch
Racine County 21.1% (proposed) –ouch!
Indianapolis 16%
San Francisco 15.58%
Chicago 15.4%
Cleveland 15.25%
Philadelphia 15.2%
New York 14.75%
Milwaukee 14.6%
Washington 14.5%
Boston 14.45%
Baltimore 13.5%
Las Vegas 12%
Source: Boston’s Office of Budget Management, July 2009


  1. Shut up and pay your taxes! We must heed our betters.

  2. Remember if the money isn't spent because there is no KRM then there would be no need for the tax. Taxing is only needed if they go and spend more money. We are all being told to tighen our belts and spend what we earn...except government.
    This seems like simple logic but no one in Washington or Madison seems to understand this simple law of economics.

  3. Again, put KRM to a referendum.

    Nobody wants it...it is a tax dollar sucking pig that no one with use!

  4. Blows my mind that we are even still considering KRM. What's even more troubling is our so called "mayor" is so supportive of KRM. This is a complete joke! More out of touch politicians!

  5. Of course I bet our mayor owns property around transit sight!

  6. Do the sales tax or don't do it at all. This isn't that complicated.

  7. You don't say? Wouldn't that be a conflict of interest?

  8. Blank, like most other people on the dole, love to spend money (KRM), but cry foul when they or their domain may have to help pay for it.
    Who better to pay for KRM than motel guests - in some sort of convoluted logic.

  9. Y'know, Racine's on the hook for Milwaukee's buses now, too, because of the RTA. We're already paying for their stadium, now their buses. What's next? Do we get to support their childcare fraud queens, too?

  10. We should be trying to encourage people to visit the area,not discourage them. Of course, who wants to visit a city that is 15 minutes from the freeway? The car is the preferred method of transit, not the train. We maybe only 30 miles from Milw, but in reality we are isolated from them.

  11. The abbreviation should be Kenosha- Racine And Milwaukee. Because it sure seems like they are going to KRAM this down our throats!!

  12. When are they going to get it? I read the Chicago Tribune and they are doing a whole series of stories throughout the paper on waste. They have exposed so many eye opening wastes of tax dollars. One such story talked about exhibitors leaving Chicago. Daley calling for lower costs to keep them. Then here we go raising prices. Wrong direction.

  13. The 10 year plan only consists of getting KRM. Which is why he can't reveal it.

  14. The problem with this idea is KRM is NOT going to bring people to Racine, it's going to take people TO Milwaukee and Chicago from Racine. So how does increasing the hotel tax in the areas that have the fewer attractions, and therefore fewer visitors utilizing hotel rooms, make any sense whatsoever?

  15. Until there is infrastructure which provides true transit options to and from rail what good is KRM? I do not conclude that our current bus system in Racine qualifies for adequate service. My statement goes for Milwaukee and Kenosha as well.

    If you do not have local transit to interface with KRM rail what is the point of having KRM? There isn't a parking lot big enough to accommodate all the cars to make KRM viable if you expect people to use KRM by driving to the rail station in their cars from home or business. And once people get to Milwaukee or Kenosha, how do they get to their ultimate destination?

    KRM has not been thought out.

  16. The money will not go to waste - it will go to the connected cronies of this project.

  17. If we are trying to promote Racine as a tourist attraction - this is a "VERY BAD" idea.

  18. I propose a 100% tax. That surely will fulfill the government objective of driving ALL business, visitors, employees and residents from Racine County. There is a reason why Racine County has one of the highest unemployement rates in the midwest and it's not just 'the economy'.

  19. If this helps John Dickert enrich his cronies why not? After all its part of the ten year plan.

  20. Look for a certain Dickert friend to get a contract putting in granit countertops in the station.

  21. Look for massive help from Dickert to support his guys in local elections.

  22. This was done in the Assembly - not at the Mayors office. What does Dickert have to do with it?

    I think someone needs to get off the computer and find a job. They need there own plan.

  23. Look for idiot bloggers to STFU

  24. Look for John Dickert to lose even more support(if that is possible) and with a GOP win in Madison in 2010, John should look for a new job out of politics.

  25. The so called "mayor" supports KRM whole heartedly. Which just goes to show how out of touch he is. This whole KRM should be squashed once and for all. The people are smart and do not want this waste.

  26. Without the Krm why would anyone come to Racine. Why not close your boarders stick your heads in send and pretend it's 1970. That seems to be what the people of Racine are good at. Never move forward never try to make your city more attractive to new business or tourism. When are the people of Racine going to wake up and join the rest of the world. I am embrassed to my friends I was born there. please give my a reason to come home.

  27. 3:01 - you need a spelling and grammar lesson.

  28. Anon 3:0qpm

    Here is your post sort of cleaned up:

    Without the KRM why would anyone come to Racine. Why not close your borders, stick your heads in the sand and pretend it's 1970. That seems to be what the people of Racine are good at. Never move forward, never try to make your city more attractive to new business or tourism. When are the people of Racine going to wake up and join the rest of the world. I am embarrassed to tell my friends I was born there. Please give me a reason to come home.
    Please look over your comments before hitting the submit button. I'm embarrassed that you admitted you were from Racine with that kind of writing.

  29. Mark Belling just did a segment this week explaining how a tiny 4-mile long monoraill in LAS VEGAS (where there's oodles of money) just declared bankruptcy. The amount owed is close to 1 BILLION dollars. For only a 4 mile stretch of public transportation.

    His point was that if a money pit like Las Vegas couldn't make a small stretch of public transportation work, why does anyone think the KRM will work?

    He's right. Taxpayers take heed. It's a joke and a disaster waiting to happen.

  30. OMG, I did a typo. MY BAD

    The last comment was supposed to be for Anon 3:01pm

  31. Hey 3:01: When I want to visit Racine I just drive there. My "transportation system" takes me from my driveway to my destination in a very cost effective and efficient manner. And it takes me anywhere I want to go in Racine, not just one or maybe two stations!

  32. Remember, Dickert appointed one of his supporters, and a former Becker insider, to the RTA.

  33. Downtown Brown1/16/2010 11:00 AM

    Hey Anon 1:08 Mayor Dickerts person appointed the RTA board is Jody Karls who serves at the pleasure of the Mayor. We can't "un-elect" Karls we can only ask the Mayor to give him the correct direction on issues like KRM and increasing our Taxes on things like Hotel's etc.
    Now If Dave Blank doesn't like having his Axe gored with a Hotel tax. why does he think anyone else should bear the Tax. Rental Car companies? (They'll simply re-locate out of Racine and Milw counties). An increased sales tax? The Stadium tax was one tenth of oen percent. this thing will need at least a 2-3 Cent tax. (Don't believe me check with Chicago and the Metra)! Fact is we Don't need this KRM thing it will not work or get ridership anywhere near the needed amount to not lose a fortune per year. One propsal that MIGHT work and would cost a lot less money is to build an extension to METRA from Kenosha to Sturtevant Station. At least it would serve as a logical Hub for assorted transit options. and people can decide to take the Slow train or the fast train. to Chicago, the Burbs, the Airports and into Milwaukee. Racine can make sure that the Bus system logically connects with the Strutevant station to provide easy affordable access to all of the rail options at the Station. Furthermore there is easy parking near Stvt. Station. We could easily build a larger secure ramp for overnight parking as well. Heres the real beauty of my proposal this more Centralized station can attract riders from Burlington and Waterford as well as downtown Racinians. Whereas the State St. Station would only entice Downtowners to ride on very limited basis. Call the Mayor and him know that Jody Karls must oppose any tax increases or phony growth of RTA. Money is tight building a risky project like KRM is Silly and a irresponsible.

    In Kenosha you'll have to buy a ticket at $8.50 or more to get to Chicago. KRM stands for Kenosha-Racine-Milwaukee! Oh, and as has been mentioned hundreds of times through these posts, there is already a very inexpensive coach that will take you from Racine to Kenosha to catch the Metra to Chicago. We don't need and can't afford the KRM!