Mar 19, 2014

Do Sandusky commissioners favor tax hike? (Updated 6:40 p.m.)

It seems as if city commissioners would raise the admissions tax, then they could solve their financial woes. Have or are they considering increasing the 3 percent rate? Jim from West Adams Street
6:40 p.m. — Story updated and includes responses from all seven commissioners.
 
12 p.m. — Original story:
 
Let's offer some background before providing answers from commissioners:
 
The tax: The admissions tax, which is a 3 percent fee tacked onto ticket sales at Sandusky-based entertainment venues, largely depends upon attendance at Cedar Point — the undisputed giant in the region’s entertainment industry.
 
The amount: City officials collected about $2.81 million in admissions tax in 2013, the most in recent times. Cedar Point's new roller coaster, GateKeeper, surely propelled this amount.
 
The proposed raise: In Jim's questions, he referenced a past Register story, indicating an 8 percent admissions tax rate would've generated about $7.5 million — virtually solving all of Sandusky's budget problems, underscored by commissioners eliminating four full-time firefighter positions.
 
If commissioners were to raise a tax, many residents favor hiking the admissions fee — as opposed to the 1 percent income tax or upping property taxes —  since it largely targets tourists.
 
The decision: For the past few weeks, commissioners have discussed whether or not residents would support a tax increase of some kind.
 
Sandusky ex officio mayor Dennis Murray Jr. started the conversation by organizing town hall-style meeting, informing people about Sandusky's budget challenges and seeking input for how to improve the city's financial standing.
 
But Murray, who's firm Murray & Murray represents Cedar Fair, has recused himself from answering the question.
 
So the Register asked every other commissioner via email about whether they favor increasing the admissions tax or not.
 
Any tax increase would likely have to be approved by a majority of voters.
 
Here are their responses:
 
• Jeff Smith: I would much rather work with Cedar Point as a corporate citizen than force a tax on (its) customers. I feel it is much more important for Sandusky to begin an aggressive economic development campaign focusing on our strengths. We need to build partnerships with local businesses focusing on creating more jobs within the city limits 
 
• Naomi Twine: I am not in favor of supporting an increase in the admissions tax. I believe that if we are going to move this city forward, we, the commissioners, should take the lead and collaborate with city staff, citizens and business stakeholders. If this commission, after exercising responsible, measured and strategic assessment of where we are, what we need to do in order to get to where we want to go, make the appropriate adjustments when and where needed, and if all parties involved believe an admissions tax increase is something that they would be willing to support, I would consider it. 
 
• Wes Poole: :The Dog and (its Reflection)", An Aesop's Fable: It happened that a Dog had got a piece of meat and was carrying it home in his mouth to eat it in peace. Now on his way home he had to cross a plank lying across a running brook. As he crossed, he looked down and saw his own shadow reflected in the water beneath. Thinking it was another dog with another piece of meat, he made up his mind to have that also. So he made a snap at the shadow in the water, but as he opened his mouth the piece of meat fell out, dropped into the water and was never seen more.
 
• Scott Schell: We can not hope to meet these challenges by cuts to staff and services alone. Part of that game plan has to be a strategy to increase revenues. We will need to look at every aspect of our current revenue stream and assess what can be improved or revised to help the city provide the necessary services to our citizens. The admissions tax is just one piece of this equation.  I would be in favor of beginning the dialogue with our community partners who contribute annually to the admissions tax. Share with them the state of the city today and our analysis of where we are headed in the next two years. Investigate how the current levels of tax impact their business today and how any potential increase might impact their operations in the future.
 
• Dick Brady: The admission tax issue creates a potential conflict of interest for myself. I own Brady Sign Company and Brady Electric Inc. Over the last 34 years, both of these companies have been a vendor to the largest contributor to the admission tax collected by Sandusky, Cedar Fair. Due to this potential conflict of interest I will be required to refrain from discussing or voting on the admissions tax issue. 

• Julie Farrar: Yes, I am in favor of raising the admissions tax. The admission tax has been the same amount since its inception. Cedar Point and the city are in this together in my opinion. I would use an admission tax increase for streets and other infrastructure improvements and also ask the citizens to get behind a safety levy to fund our police and fire departments.

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Comments

tk

If people can't afford an extra couple of bucks for a ticket then obviously they don't have hundreds of dollars to spend locally. Besides that, most of what they spend is in Perkins township, not in Sandusky. If they really want to go to Cedar Point then they will pay the tax and go.

SamAdams

...and now I'm even MORE disgusted than I was! The admissions tax is NOT paid by Cedar Point. It's simply tacked onto whatever prices they happen to charge for admission. And as can be seen by the simple math done by a couple of people above, the increase is negligible. NOBODY is going to decide to come or not to come to Cedar Point over a dollar or two. NOBODY.

I understand why Mr. Murray and Mr. Brady are recusing themselves. No matter WHAT they say, they DO have a stake in Cedar Point itself and should avoid even the appearance their answers are biased. Good for both of them for having some common business sense and ethics. As for the REST of you commissioners? Shame on you!

Mr. Smith, economic development will be actively DIScouraged by increases in property and/or income tax. Ms. Twine, you work for the government already. Mr. Poole, cute story, but nothing whatsoever applicable here, especially when the admissions tax here is abnormally LOW. Mr. Schell, you at least are headed in the right direction, but you're not entirely right, either.

Guys, this is up to US. The Commission isn't going to do diddly unless it's tax you and me some more. The City Manager is (as has already been amply shown) pretty much a joke. The rest of the City staff has little to say about funding (other than as voting residents). So...

YES. If there's a meeting, I'll go. If there are petitions, I'll sign (and I'll help circulate them). I don't see why the admissions tax has to jump to the "standard" (apparently) of 8%, but why not jack it up to 5% or 6%? We'll still be lower than almost everywhere else, but we'll get the City the added income it desperately needs WITHOUT hurting residents any more. Let's get this on the ballot, people! It's pretty obvious nobody is willing to make the RIGHT choices except us!

Bogtrotter

Saturday, April 5, 11 am, Mr. Smith's. Are you available?

SamAdams

I'll make a point of being so. Who else???

Bogtrotter

.

donutsh0pguy

I'm in will bring some soldiers to fight this fight.

"Save City Services Tax the Tourist"

Nemesis

Sam, why 5 or 6 percent? A million dollars in added revenue isn't ENOUGH? Adding another 1 or 2 million on top of that will only be used by commissioners to buy re-election from the dependent class.

I thought you wanted to shrink government, not grow it.

Bogtrotter

T

SamAdams

Right now, our admissions tax rates stands at 3%. The average for admissions taxes is 8%. I see no reason, financial or otherwise, to take maximum advantage by upping the tax rate to 8% in one fell swoop.

As for shrinking government, you're right: I'm all for it! But there are a few things government is SUPPOSED to do, and one of those things is safety services. Obviously, we need to keep an eye out to ensure that lots more employees aren't hired (the City has proved it can cut personnel levels and still function), that Commissioners, etc. aren't given raises (why???), that programs the government ISN'T supposed to have its nose into aren't funded (more useless studies, various and sundry grants, and the like), etc.

Nemesis

Then give them what they need for safety forces, not the whole nine yards. 8% would roughly generate an additional $5 million, which is WAY more than they need to maintain safety services and other legitimate government functions. They're short by less than 1 million, so you're advocating giving them $4 million more just to play with, and play they will.

In case you didn't notice, we'd like to have some economic development. You succeed in a free market economy by COMPETING, i.e. pricing yourself BELOW the competition. We want Cedar Fair to invest in CP FIRST, and then the other parks, to keep it their flagship venue. Recent battles among CP's investors have included as their key issues whether leadership might move HQ and focus investment elsewhere. CP is no longer a standalone entity - it's one piece of a corporation. Learn the lesson Detroit failed to learn; most of the auto industry's facilities are elsewhere now.

Maxing

Babo

Clearly Murray and Brady have conflicts of interest in ANY discussions on raising revenue through taxation by ANY method as they ADMIT they have a conflict of interest in regard to the admissions tax. Therefore, they should be required to recuse themselves on ALL tax discussions as they both ADMIT they are BIASED and NOT willing to act in the best interests of the community. These conflicts are grounds for recall and or complaints to ethics and legal conduct agencies.

Also, as others state: Cedar Point does not collect nor do Tourists pay any sales tax on the ticket prices. At least raise the Admissions Tax to 7% the same as the sales tax which as everyone knows is paid by the purchaser of the ticket NOT Cedar Point. The only reason CP opposes any increase is because it will limit their ability to jack up their prices.

Rather than raising income taxes and driving more productive residents and businesses out of Sandusky and into neighboring lower taxed areas; Sandusky should raise the Admissions Tax to 8% and CUT its income tax to 0.5% or even eliminate it altogether.

I am not a resident of the City but I will help circulate petitions if that's permissible.

Nemesis

The reason CP opposes it is that it will reduce the return on their investment. What no one seems to understand is they are under no obligation to continue investing if the city creates conditions that diminish the expected returns, and now that Cedar Fair has parks around the country, they can shift their investment elsewhere any time. A small increase in the admissions tax would suffice for all LEGITIMATE government expenses.

Julie R.

The city of Sandusky acts like the tourists are better than the citizens. Shouldn't it be the other way around? I honestly believe it's why the city of Sandusky, not to mention ERIE COUNTY, never did much when all the good-paying factory jobs started leaving this area. They probably figured all the peons would be forced to take minimum wage jobs at the waterparks & Cedar Point just to make the rich richer.

And now they want to tax the peons even more?

MiddleRight

Even if this new revenue is generated, the city needs to take a serious look at its expenses.

Man of the Republic

How people's memories are so short. We want to make the argument that other tourist Meccas (and I do not think Sandusky comes close to comparing to the coming list) such as Las Vegas and Orlando have much higher tax rates. These are the same cities that took a huge beating the last economic downturn. Lets face it, the economy is recovering at an alarmingly slow rate, take home pay is down, average family income is down, so taxing the people that keep this town alive should not be in the cards. I like the attitudes that Commissioners Smith and Poole have here.

Bogtrotter

E

T. A. Schwanger

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I might add the cost of a "gate purchased" admission to Cedar Point has risen from $44.99 in 2009 to $54.99 in 2013. If Cedar Fair had a true concern of loosing customer base, they would have held the line on ticket prices.

As for elected officials supporting an admissions tax increase, they point out the income tax has not risen since the late 1960s. Note, the admissions tax has not increased since early 1970s.

Dollar figures in approximations---Income tax $6.7 mill/year. Admissions Tax $2.7 mill/yearly--just a little uneven.

DGMutley

You're right.

Cedar Point isn't bashful at all when it comes to raising prices.

Nemesis

"Income tax $6.7 mill/year. Admissions Tax $2.7 mill/yearly--just a little uneven."

Admissions tax is a consumption tax, which is inherently regressive. Your hammer and sickle are looking a little tarnished, Tim.

Nemesis

"Somehow, I imagine that Cedar Fair will manage to find a way to live with another increase."

Sure - one way is to shift investment to other parks, ones in warmer climates where they can operate more days each year. Northern Ohio winters take a big bite out of the bottom line, because they still have to make payments on debt, property taxes, insurance, and partial payroll even though they're not bringing in any revenue during those months. Not so for Vegas and Orlando, or places like Anaheim where Cedar Fair has another park to which they could shift their big investments in cutting edge rides.

The reason so many investors abandoned Geauga Lake was a community that was hostile to their bottom line.

donutsh0pguy

Simpleton, Cedar Fair abandon Geauga Lake for ONE very simple reasons.

1) That dump was nothing more then a glorified carnival!!

Quit spreading your lies to the people Cedar Point is not going anywhere.

If the funds go to make Sandusky a better place to live it will only help Cedar Point

donutsh0pguy

Simpleton, Cedar Fair abandon Geauga Lake for ONE very simple reasons.

1) That dump was nothing more then a glorified carnival!!

Quit spreading your lies to the people Cedar Point is not going anywhere.

If the funds go to make Sandusky a better place to live it will only help Cedar Point

Bogtrotter

SATURDAY, APRIL 5, 11 AM, MR. SMITH'S. RAT (raise admissions tax) kick off meeting.

WHO IS ATTENDING?

T. A. Schwanger

###

One suggestion.

Make the increase in the admissions tax specific streets, sewers, park.

I've been following Sandusky City Government for years and every time a tax increase raises it's ugly head, talk of moving City Hall is in the same sentence. The temptation to raise taxes for City services and then redirecting existing dollars to non-essential projects is way, way to great for the City Commission to pass up.

Bogtrotter

F

Nemesis

"I'm hoping that if the admissions tax is increased, the next election for city commissioner will be about how the additional funds should be spent."

Dream on....
If you give it to them, they will waste it.

"Giving money and power to politicians is like giving whiskey and car keys to teenage boys." - P.J. O'Rourke

T. A. Schwanger

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@ Bogtrotter

Points well taken. I will point out discussion from the City Commission table regarding an increase in income tax or a property tax levy have focused on detailed use of the new revenue (safety services), so one would think an Admissions Tax increase petition could be drawn up to function in the same capacity.

If there is enough support from the community in circulating an official, legal petition, make sure to use the correct petition form--Municipal Charter Amendment.

reader

Tim, will you be helping with the effort?

T. A. Schwanger

###

@Reader. I will attend.

Nemesis

It doesn't have to be a charter amendment - referendum initiatives can be used to mandate standard ordinances on anything from taxes to the color of police cars.

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