Albany County is considering increasing its hotel occupancy tax.
The Democratic-controlled Albany County Legislature is considering raising the tax from 6% to 6.5%, an estimated increase of $766,000.
19th District Republican Legislator Todd Drake spoke out against the proposed Local Law J at Monday's meeting.
"Many people don't understand or have cognizance of the fact that the hotel industry is just recovering from the COVID-19 era," Drake said. "It's been over for people for a long time, but the hotel business is just getting on its feet. And one of the things, one of the gentlemen I talked to said, 'hey, look, it's been about five months that we've been operating, really, as normal business again,' but the difference today is this, labor costs have dramatically skyrocketed in the last five years, about 30% depending on who you ask. At the same time, cost of goods and services have skyrocketed again. Is it 20? Is it 30%? Depends on who you ask. But at the same time, hotel average daily rate has flatlined, or even had to be decreased. The time for a tax raise, according to the people I know, and from my perspective, isn't now. It's a bad time, and maybe in the future, it is. But today, it isn't."
Drake noted that an increase in the tax would likely not affect individual travelers, but it could send weddings, conventions and corporate outings to hotels in neighboring counties.
Fellow Republican Legislator Mark Grimm represents the 28th district. He says the proposal was tabled without explanation Wednesday.
"That means it can't be in the July 8 meeting, unless this is another tricky thing. Sometimes during the legislative meeting, just before it they can call what a rule 11 is, which allows them to alter the rules and then have a committee meeting off the floor prior to the legislative meeting. And usually that's last-minute notice too," said Grimm.
Democratic Legislature Chair Joanne Cunningham says there’s nothing tricky going on – the delay is a procedural issue related to pending state legislation regulating short-term rentals.
"We are waiting for the governor to sign the bill, and once she does, then Albany County can kind of finish our piece of the puzzle, and we will then move the tax out of the Law Committee, bring it to the floor, and then it will pass and be done. We've already held the public hearing, so we're all good to go. From our end, we're just waiting for the governor's signature," Cunningham said.
Drake and Grimm doubled down on their argument that an occupancy tax increase will make Albany less competitive with neighboring counties.
"If you're in $150 a room night, $5 is something people will shop for," Drake said. "So when you're out there putting additional taxes, and we're competing with, we as a county are competing for these groups and these outings, with Rensselaer County, with Saratoga County, with Schenectady County... Schenectady County's building that 7,000-square-foot space out there. Hey, why not go there? We have to become more competitive. So the sentiment that I've been, that's been shared with me is this is a bad time to put us in a less competitive spot, when we're competing with Saratoga raceway, we're competing with the new, you know, the casino were competing with Rensselaer County, they all said, 'Look, people are willing to drive the extra 10 minutes away from the airport to go to these places to save a buck.'"
The Republicans suggest the county look to other revenue sources to advance economic efforts, such as tapping into the fund balance reserve, which stood at $139 million at the end of 2023.
Discover Albany declined to comment. The New York State Hospitality and Tourism Association said no one was available for comment.
