We’re not sure why the focal point of the debate over lodging tax funds is playing out at city hall, but nonetheless, there needs to be oversight of these tax dollars as well as accountability.
While the Ely city council gave a decisive 6-1 vote to back the actions of Paul Kess, one of the members of the Ely Area Lodging Tax Joint Powers Board, there is still work to do.
One of the top concerns has to be that all the lodging establishments are following the law and collecting the lodging tax. There is agreement that this is not happening now.
In the old days, say 10 years ago, it would be easy to check for lodging tax collection compliance. You could look up the hotels, motels and resorts in the area and make sure they were on the list. That has changed dramatically, and many would argue not for the better, when people started renting out their homes and cabins.
Now there are commercial operations in neighborhoods and on lakeshores across the area. Those who own and rent out their property say they have a right to do so and governing bodies have been slow to put rules and regulations in place to protect the rights of the adjoining property owners.
With that in mind, conglomerates like VRBO and AirBNB have run roughshod over state laws that govern what taxes they must collect. Some properties have gotten away without paying and some have paid the monies to the state of Minnesota instead of the local lodging tax fund.
That’s left the Ely Area Lodging Tax Joint Powers Board scrambling to get agreements in place and go after the non-payers. Then there’s the other elephant in the room, Lake County. Instead of providing a complete accounting of monies collected in Fall Lake Township, the county is paying an estimated amount. We’re betting it’s lower than what is actually owed.
Those are the top issues involving lodging tax. How the monies are spent is up to the representatives on the joint powers board, including Kess. The board has its own attorney and has done its homework to determine how the monies can be spent. This has rankled some and that’s understandable. Change is often difficult.
Let’s make it even more interesting. Lake County was able to get legislation passed where one-fourth of the lodging tax dollars collected can be used for events. This sounds like something Ely could definitely use.
There is obviously some hard feelings between the various parties involved here. There was even a mediation session held to try to resolve those issues. Apparently that money was the most egregious expenditure to date.
That the joint powers board is questioning how the local lodging tax monies are being spent is a good thing. These are tax dollars and we only have to look to the state of Minnesota’s fraud problems to know a lack of oversight is not good.
Let’s hope everyone involved can find a way to see beyond their own interests and compromise can be found.
