Thank you to everyone who took the time to come out to testify and submit written testimony to the Economic Development and Budget Committee. The County Council reported hundreds of testimonies came in. The council members learned a lot about the Short Term Rental and Bed and Breakfast industry through testimony and they have posted their rates for the upcoming year in their April 29, 2019 meeting. The rates came in at $10.75/$1000 for Short Term Rental with an increase of $1.47. Commercial residential came in with a $0.05 increase to $4.60/$1000. While we were unable to curtail any increases, this is much better than their original proposed $15 rate. The council is still taxing Short Term Rentals rigorously. We did see a shift with Hotel rates taking the biggest increase of 49%, but short term rentals are overall creating more revenue for the county real property tax.
The council increased real real property taxes $36.8 million from FY19 to FY20 for an overall increase of 11.5% over last year's budget. The Mayor had proposed an increase of $19.6million or 6.1% and the Council added an additional $17.4 million to that figure.
Of that $36.8 million tax increase:
$22 million is being generated by increases to the short term rentals
$10.7 million is being generated by increases to the Hotel resort classification
$2.5 million is being generated by increases to the Residential (second home) classification
The next step in the process of adoption of these rates is the public hearing at 11:00 am on May 10. The council will hear testimony, but will not change these rates. The Mayor is not likely to veto or change these rates either.
Between the Time Share, Hotel, Commercial Residential and the Short Term Rental Rates, the Visitor Accommodations sector of our island's industry is generating 48% of the County Real Property Tax budget, or $169.8 Million. Of This the short term rentals and commercial residential combined generates about 30% percent of the real property tax revenue. What this means is that Short Term Rental Homes and Bed and Breakfast operations are vital to our county economy. A fact that we have known all along, but one the county can no longer ignore. I noticed the hotels often threaten in their testimonies that they employ so many people that they cannot suffer high increases in their taxes or large layoffs result. This resonates with council members.
What I would like to do is gather data from you members, with respect to who we are employing in this healthy tertiary market of property managers, maintenance businesses, cleaning businesses, interior designers, landscapers and the like. We can continue to educate the current council on our industry which is so critical to the health of our community, as they have so boldly indicated by their budget. If you are not a member take a moment to join us and be a part of this membership!