For Amana tax debate, local control is key

For Dan Rettig, it just makes sense that the Amana Colonies should be able to set their own tax on lodging, taking away that power from county leaders.

'Who is best to determine how that money is used? In the Amana Colonies, we feel we are the ones who know how it should be used,” said Rettig, executive director of the Amana Colonies Convention and Visitors Bureau.

If a proposed bill is approved, Iowa County's leaders no longer would have a say about how hotel and motel tax money generated by tourism are used.

'The board of supervisors control the hotel-motel tax in rural areas and suddenly, because one group didn't like the way we were spending the money, they're changing the law” to take away control, Board of Supervisors Chairman Ray Garringer said.

The proposal, House File 186, would allow land-use districts in Iowa to establish their own hotel and motel tax. Only counties and cities now are allowed to do so.

If a district imposed the tax, the county in which it's located could not tax lodging in the district.

Because the Amana Colonies are the only land-use district in Iowa, the legislation affects only the one area. The Amana Colonies Land Use District, a board that oversees the Amana Colonies, would have authority over the tax.

The Iowa County Board of Supervisors drafted a resolution last month opposing the bill. Garringer said the board wasn't notified of the legislation until it had been introduced.

Both Rettig and Garringer said they don't know exactly how much of Iowa County's hotel and motel tax is generated from the Amana land-use district. Rettig said, though, his organization estimates it at 50 percent.

Should the measure pass and the Amana Colonies impose its own tax, it would raise an 'unknown amount” for the district, according to a state staff fiscal note. Iowa County's share of the collections then would decline by that amount.

The amount of hotel and motel taxes collected by Iowa County has fallen in recent years, Iowa Department of Revenue numbers show.

Iowa County collected more than $326,000 from the tax in fiscal year 2008. That was down to about $131,000 in fiscal 2016.

Rettig said tax collections are down because of competition for hotel space from Coralville and Iowa City. As offerings in those cities have grown, fewer people are staying near the interstate exit for the Colonies.

As collections declined, Garringer said the county supervisors 'were having trouble seeing a return on our investment” from the Colonies and have used the money to help fund other projects.

'The Amana Colonies don't feel like (they're getting) what they consider a fair share of the money,” Garringer said. 'Our response to that is, over the last 10 years, we gave them $900-and-some-thousand dollars. And, at the same time, we watched our hotel-motel tax go down from $300,000 to $100,000.”

Diversion of the tax money away from the Colonies led the visitors bureau there to seek the legislation, Rettig said.

'Those other things are worthwhile projects, but the problem is you cannot sustain a fund if you don't reinvest in it,” he said. '(HF) 186 will give the Amana people control of their portion of the money.”

The legislation passed out of a House committee Monday.

First settled in the 1850s, the Amana Colonies are made up of seven villages that have attracted tourists with their restaurants and craft shops.

l Comments: matthew.patane@thegazette.com; (319) 398-8366