City exploring ways to raise revenue

City manager to hold talks with Cedar Point as citizens push doubling of admissions tax
Tom Jackson
Jul 15, 2014

jackson@sanduskyregister.com

New Sandusky city manager Eric Wobser, who attended his first official city commission meeting Monday night, has begun discussions with Cedar Fair officials on how to raise city revenues without putting all of the burden on raising the admissions tax on Cedar Point tickets.

It's an approach that's being urged by Sandusky's ex-officio mayor, Dennis Murray Jr., who warns that a proposal to double the admissions tax from 3 percent to 6 percent might alienate Cedar Fair and cause the amusement park giant to consider moving its headquarters from Sandusky. 

Two women who spoke during the audience participation portion of the meeting said they still strongly favor doubling the admissions tax and alleged that the main alternative would be to raise everyone's income taxes.

Toward the end of Monday's meeting, Murray began the discussion on the contentious issue by saying that after chopping nearly a third of the city's workforce in the last 10 years and cutting spending by 25 percent, it's not possible to make further cuts and maintain city services at current levels.

"What next?" Murray asked. "Do we close Station 7? Do we brown out Station 3 as well with its dramatically higher call volume? Do we cut the police force? Do we sell off the parks because we can no longer maintain them? How will we address the 800-plus dead and dying trees in tree lawns?"

Murray said he's quit representing Cedar Fair in his law practice so he can address the revenue issue, adding that a push to hike the admissions tax from 3 percent to 6 percent means a solution must be found quickly. Doubling the tax is a bad idea, Murray argued.

"It is too much and places the entire burden of replacing lost revenue on our largest corporate citizen, at the risk of alienating them and even causing them to move their headquarters," he said. "They would not put it that way, but it is no secret, either. Nor will Cedar Fair say this, but it is also reasonable to expect that they will actively oppose a 3 percent increase."

Murray said Wobser has been approached by Cedar Fair representatives, who understand that Sandusky needs money but who want to arrive at a fair solution. At Murray's urging, the commission voted unanimously Monday night to authorize Wobser to continue those talks, so that the city can meet an August 6 deadline to put a proposal on the November ballot.

City commissioner Julie Farrar said she agrees with Murray.

"We cannot cut anymore," she said. 

Cedar Point spokesman Bryan Edwards said Monday afternoon that his company is opposed to a tax that will fall disproportionately on one company.

"We're a successful company that has its headquarters here. We want to keep our headquarters here," he said.

Sandusky resident Jennifer Brindley, speaking during audience participation, said she's working to put an issue on the ballot to double the admissions tax. 

"Residents are asking for that," she said. "They want their Fire Station No. 7 kept open. They want their roads fixed. They want hundreds of dead trees removed."

Brindley asked commissioners if the alternative to hiking the admission tax is to raise income taxes.

She was followed at the podium by Vicki Byrd, another city resident, who said she also favors hiking the admissions tax.

"Evidently, I'm standing up against a corporation," she said. "Cedar Point does not pay that admissions tax. I pay it. We pay it."

"I will not vote to raise my income tax," Byrd said.

Wobser did not jump into the debate but said earlier that he's excited to come home and serve the city.

"It's just an incredible honor to be here," he said.

Comments

The Bizness

I am not sure how Cedar Point could argue that a raise would hurt their company. I have a feeling CP's attendance will still rise next year as it almost always does.

reader

And if raised to 6 percent, the admission tax would still be lower than many other locations across the country.

Dr. Information

What you are also forgetting is Cedar Point isn't opened as long as these other parks. Some parks do not close down south.

JT Adams St

First, Cedar Point doesn't pay admissions taxes. It never has it never will. When you buy a car, who pays the sales tax? You do. The dealer simply collects it. It's the same thing with the admissions tax, Cedar Point simply collects it, it's Sandusky residents and other Cedar Point customers who pay the tax. How would you feel if the Chevy dealer whined to you about having to pay sales tax on the new car you just purchased? You should feel exactly the same way about Cedar Point whining about having to pay admissions taxes.

Second, Cedar Point collects a disproportionate amount of the admissions taxes because it is the only billion-dollar operation in Sandusky. Obviously, the admissions tax burden would fall less heavily on Cedar Point customers if Disney World were also located here. If LeBron moved to Sandusky, he would pay a disproportionate amount of municipal income taxes. Why? Because he makes as much money as 1,000 Sandusky residents. Would it be unfair for him to pay a disproportionate amount of income taxes? No.

Third, even if the admissions tax were increased to 6%, that would still be LESS than the sales tax. That's right, for all of the whining about the admissions tax, it is less than half the amount of the current sales tax. How is that fair?

Fourth, losing the puny amount of income taxes paid by Cedar Point's corporate employees would be a drop in the bucket compared to the $2.5 million a 3% increase in the admissions tax would generate.

DEATHnTAXES

LIKE

DEATHnTAXES

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Darkhorse

I am afraid that Mr. Murray has met his match with the two ladies. The city manager has no idea what he has gotten himself into. I just hope he doesn't get in over his head because the commissioners will throw him under the bus when things start to go bad. History has a way of repeating itself especially when there is development on the drawing board. Any company will pass any additional expense onto the customer just like ticket prices and parking costs.

The Bizness

Exactly, raise the admissions tax and CP will raise their ticket prices even more than they should and claim it is because of the admissions tax...

I am a CP season ticket holder, and love the park, so I am the one paying this tax, but I am all for it.

JT Adams St

As for Cedar Point wanting to keep its headquarters here, what's stopping them? Their insistence that they behave like a petulant child if they don't get their way on the admissions tax issue? Once the admissions tax is increased, Cedar Point moving their corporate offices isn't going to get the admissions tax rolled back. Nor is it going to save them any money. It's simply going to be an expense that Cedar Point is willing to incur to express its displeasure, like a dog that chews up a slipper when you leave it at home alone. Obviously, if Cedar Point has money to waste moving its corporate offices just to prove that its angry, it has money to burn. I wish that I could afford to pack up and move every time the city commission annoyed me.

Truth or Dare

Hey Darkhorse; True to form, C.P. increases their prices every year. Their stats for 2013, which was a record breaker for revenue and attendance if I'm not mistaken, brought into this city 17.3 thousand people per day over a 6 month period. C.P. is also the #1 visited amusement park within this nation.

Talk about being blind sided, which was pointed out it should of been expected. Anyone else but me see on the horizon and in less then a week an executive session of the city, making the decision to put a 1% raise in admission tax on the ballot before the Aug. 6th. deadline? I am hoping there will be two, theirs of which all city taxpayers get to pay for, and Rebuild Sandusky's for 6%, of which is being paid for through private donations of those that are like minded. A right by the way to follow through in an exercise of our democratic process! Let the voters choose! Hint; Would you rather pay something you can control as to when you pay it, or would you rather have it taken from you every pay period, knowing darn good and well you have no control over how it is managed?

It truly behooves me that C.P. would be able stop in any way something the people took the initiative to work for and through the votes of the people, passed!

I also believe we will see an Income Tax levy as well, for an additional 1.5%. How many working for the city live outside of it and won't have a vote regarding this increase? How many are working for C.P. that live outside of the city and won't have a vote? How many folks working in the city for our other large businesses, as if C.P. and F.R.M.C. are the only two businesses, won't have a vote in their taxes being raised? That my friends is taxation w/o representation.

JT Adams St

When the commissioners were asked in March about increasing the admissions tax, the Register reported that "Murray, whose firm Murray & Murray represents Cedar Fair, won’t answer the question because of his work relationship with the amusement park." After four months of silence because of this conflict, the mayor can finally speak. And what comes out of his mouth? Threats from Cedar Point. It would have been nice for him, after resolving his conflict, to act as an honest broker at a single commission meeting before he started issuing threats.

Babo

Also, it's a pretty safe bet that Murray and Murray still represent CF and that Dennis Jr is just not working on their files. Note he didn't say the firm no longer represents CF.

So if the firm still represents CF, he is still profiting from CF as he is a partner in the firm and shares in profits. IMO, he's on very thin ice in terms of legal ethics and the supporters of the Admission tax might consider filing a legal grievance on him.

downthemiddle

If CP pays city income tax it goes away if they move the office. Put a pencil to that.

Personally, I think the entire CP mgmt. should be fired over the roller coaster naming stunt.

doppleganger

The tourists put a great deal of wear and tear on our roads and most of them (tourists)are going to Cedar Point. For Cedar Fair not to recognize that is appalling. The admissions tax is needed to help pay for improvements to those roads among other things.

Comrade Boose

Want to help Rebuild Sandusky?
Meeting this Saturday July 20th 11am
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Tourist

As one of those people who visits Cedar Point several times a year, in addition to gouging ruts in your city's streets, I often stop and purchase things in Sandusky. And I must ask, does anyone in town ever try to consider how to cater to visitors and make some profit (thus helping your economy), instead of just complaining about them? From my experience, Toft's Ice Cream is the only place I've seen that makes an appropriate effort to accommodate some of the 17,000 extra people passing through Sandusky every day. Finding a place to eat after leaving the park is a real challenge.

Thomas Paine

AMEN!!!!!

Thomas Paine

Please visit downtown Sandusky when you visit...there are some really great new places that cater to visitors. As a long time resident I am embarrassed by how the residents here treat the visitors. We have made tremendous strides recently. Both Shores and Islands and our new city manager both seem to get it and have done a wonderful job recently of promoting the area as a destination.

doppleganger

You should try Crush or Zinc downtown. If they are too pricey after you are "gouged" you could try Subway if they are open. From my point of view: my taxes are high enough. Tourists (not you in particular) use our resources and it is only fair that they pay something to try and keep these services intact. Lots of police calls for people that are not residents of our city every day in the police blotter. If you come here to spend a day at Cedar Point, you are going to spend some money. Will you turn around and go home if it is $2.99 in admission taxes instead of $1.49? Really?

Tourist

A few dollars won't keep me out of Cedar Point. And you have good points about city services. I guess I see a lot of untapped potential when I drive through. (Sandusky is not alone in this by any means.)

bigdad1205

Where are they going to move their headquarters to? One of the cities they already have an amusement park in already that already has a higher amusement tax than we do. Go to the park the sign for tickets says $49.99 +taxes. The only way this affects them is the patrons would have less money to spend on a $4.00 coke.

FalconBall

And that's $4 less income for CP. Visitors will cut back on other things which may hurt area businesses as well. The unintended consequences will always bite you.

JT Adams St

Every dollar of tax revenue that Sandusky generates is one less dollar that could potentially be spent on a pepperoni pizza from Cameo. But if you want roads and safety services, somebody has to pay taxes. Would you really pass up $2.5 million in additional tax revenue on the theory that but for a 3% increase in the admissions tax, Cedar Point customers would come downtown for dinner?

wjs

Don't they flood downtown now? If some are to believed, tourists are destroying the roads in Sandusky. If that's true, they're certainly driving beyond the two miles of Milan Ave, Butler St., Cleveland Rd., and Cedar Point Road, right?

Thomas Paine

Just going to play devils advocate and argue the other side for a moment since it appears the majority are looking at it from just from their point of view. Cedar Point not only makes money from people paying to attend but also those that eat play games, and spend money inside the park. If you tax the 3,000,000 annual visitors extra to get into the park...some will choose to spend less to spend in the park. So Cedar Fair/ Cedar Point will have lost revenue because of a higher admissions tax even if they do not pay it. Doubling the tax without regards to the other sides view because they are a corporation and have money is a bad way to promote business and job growth in the area. It makes sense to approach the company that realistically is the identity of this area to come up with an agreement. I will even open up a bigger can of worms that nobody wants to touch but I believe discussing a Sandusky/Perkins merger should also be on the table.

doppleganger

Will you turn around and go home if it is $2.99 in admission taxes instead of $1.49?

wjs

Do you think it's that simple?

wjs

The admission tax is built in to the price of the ticket. A one-day ticket is $49.99. It is not $49.99 + 3% tax. So, it's not the same as buying a car or any comparison to sales tax. I'm sure they could sell it "plus tax," but they don't. And I'm sure there are lots of reasons for doing it the way they do. Regardless, whether the tax is presented separately or it's bundled, the bottom line is still an increase in the price of a ticket. That has an impact on everything it touches. It impacts attendance, which impacts the bed tax. It impacts Cedar Point's ability to increase prices to pay for new capital projects. Less money for new projects then also impacts attendance. After all, new rides aren't built for fun, they're built to keep bringing guests in to the park. If attendance was a guarantee - like some folks here seem to think - there would be no reason to build new projects. And maybe the impact of a 3% increase isn't catastrophic, but voters are doing themselves a disservice if they don't think through all the ramifications.

It also impacts the city's dependence on the tax. I can't believe no one is worried about the increase of the city's budget that is attributed to Cedar Point. In recent years, the admissions tax has accounted for roughly 18% of the city's overall revenue. If the tax doubles, and other revenue stays the same, that percentage jumps to 31%. The total revenue provided by income tax would fall from 44% to 37%. Are voters comfortable with that?

Similar cities in Ohio:

Wooster. In 2013, a 1% income tax made up 62% of $16 million budget. City raised tax to 1.5% for 2014.

Xenia. In 2009, 1.75% income tax made up 53% of revenue. It was not enough revenue to keep the city operating, the tax was raised to 2.25%.

Tiffin. In 2012, 1.75% income tax made up 57% of $12.5 million budget.

These cities, and many others, manage without the $2.8 million "head start" Sandusky gets. So the answer is to *further* reduce the dependance on income tax? Residents should be thrilled at having such an economic advantage within the city limits. But beware of the consequences of trying to shift the revenue burden too far to one side.

Thomas Paine

If these statistics are true it should end the argument about doubling the admission tax. But lets not let facts, logicical thinking, and the understanding that every action has some consequence get in the way of a good story.

JT Adams St

So, you think that if Sandusky increased its income tax by 75% to 1.75%, it would be more attractive to businesses interested in relocating here? Really?

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