Luzerne County hotel tax down $800,000

This year’s Luzerne County’s hotel tax collections are down by nearly $800,000 compared to 2019 due to coronavirus pandemic declines in conferences and travel, the latest county tally shows.

Two entities rely on this revenue — the county Convention Center Authority that oversees the Mohegan Sun Arena in Wilkes-Barre Township and the county Convention and Visitors Bureau, which promotes tourism.

County tourism head Theodore Wampole raised the issue during his 2021 budget presentation this week, telling county council the revenue decline created a “tough” fiscal situation.

The county collects 5% of the 11% hotel tax, with the rest going to the state. After the county Treasurer’s Office takes 2% off the top to administer the county portion, the split is 80% for the arena and 20% for the visitors bureau.

This year, the county collected a total $1.57 million through September, which is the most recent finalized data compiled by the Treasurer’s Office. That’s $797,420 less than collections for the same nine-month period in 2019.

Tourism

Wampole’s agency received $308,835 from the hotel tax through September this year, or a decrease of $156,300 compared to the same time span in 2019.

In the proposed budget Wampole presented to council Tuesday, he is forecasting $350,000 in hotel tax receipts for 2021. The agency had budgeted $562,550 from the tax this year.

Wampole told council he has reduced some 2021 expenditures to accommodate his shrinking revenue allotment.

For example, he cut nearly $47,000 from his advertising budget, for a new proposed allocation of $72,900. Wampole also chopped $39,500 from printing expenses, saying the agency ordered extra visitor guides this year so a new guide won’t be required in 2021. His proposal also reduced promotional spending by $5,500.

Advertising cuts are warranted because fewer events are expected, at least in the early part of the year, he said. And though the county agency had been trying to help local businesses by promoting the county as a safe place to visit, it also must be sensitive to the state’s “different message” amid restrictions aimed at reducing coronavirus spread, he said.

Wampole said he optimistically added $75,000 in revenue to next year’s budget for sponsorships he would expect to fund a summer concert series on the River Common that had to be cancelled this year due to the pandemic. Budget adjustments will be made if the free live concerts can’t be held, he said.

Like other county departments, Wampole budgeted $3,140 for 1.5% merit raises for nonunion workers. Council members have not yet voted on whether raises will be collectively funded as requested, reduced or eliminated in next year’s budget.

Councilman Walter Griffith told Wampole he does not believe any raises should be provided to county non-union workers next year, including those in departments like the tourism agency that do not receive county operating budget funding.

Arena

Hotel tax receipts for the arena were $1.235 million through September this year, which is $625,200 less than collections for the same nine-month period last year, the county report shows.

This revenue is used to pay the debt to construct and continue improving the facility — essentially the mortgage — Gary Zingaretti, chairman of the county Convention Center Authority, said Wednesday.

Fortunately, the arena board built a reserve in prior years from funds remaining when hotel tax receipts exceeded debt repayments, Zingaretti said.

The board has been forced to tap that reserve this year to cover portions of the approximately $160,000 in monthly bond repayments when the hotel tax receipts came up short, he said. About $450,000 is currently left in the reserve, he said.

“Prior boards did the smart thing and put the extra money in a safety net to protect the arena in cases where there is a downturn,” Zingaretti said.

A greater concern is covering facility operational costs because there is “no real revenue stream” coming in with the pandemic cancellation of events and bans on mass indoor gatherings, he said. All but two arena workers were furloughed months ago, although some have returned on a rotating basis to tackle maintenance projects that are easier to complete when the facility isn’t busy and regularly occupied, he said.

“We’re OK with paying the mortgage on the place. It’s paying the utilities and employees that have been our most difficult task,” Zingaretti said.