Commissioners amend hotel tax; battle looms with tourism agency

Tourism executive Jeff Kotula claims the move is a violation of state law.

Washington County commissioners voted Thursday to move forward with amending the county’s hotel tax ordinance, advancing a proposal that would significantly change how millions of dollars in tourism revenue are distributed and potentially setting up a legal fight with the Washington County Tourism Promotion Agency.

The ordinance revision was approved on a 2-1 vote, with Chairman Nick Sherman and Vice Chairwoman Electra Janis voting in favor and Commissioner Larry Maggi voting against it.

The vote authorizes County Solicitor Gary Sweat to continue drafting a revised ordinance that keeps the hotel tax at 5% but alters how the revenue is divided.

Under the version advanced Thursday, 4% of the tax would go to the Treasurer’s Office for administrative costs, 20% would be distributed directly to the Tourism Promotion Agency and the remaining 76% would be placed into a joint account titled in the name of the Washington County Board of Commissioners Office and the Washington County Tourism Promotion Agency.

Spending from that account would require agreement from both parties.

That distribution reflects a change from what was discussed earlier in the week, when commissioners proposed increasing the treasurer’s administrative fee to 5%.

County officials said Thursday that proposal was adjusted after concerns were raised that the increase would violate county code.

The hotel tax generates between $2 million and $3 million annually from visitors staying in county hotels.

Commissioners in favor of the amendment say the current ordinance, last revised in 2017, gives the county no meaningful oversight of how those funds are spent.

Following the vote, Sherman said the driving force behind the ordinance is transparency and accountability for public tax dollars.

“The purpose of this ordinance is to have transparency over almost $3 million county tax dollars. We have asked questions and tried to have a seat at the table but have been ignored,” Sherman said. “We need better results for how this money is being spent. Even with their own audit, nearly half of that money is going to management and consulting fees.

“There are also exorbitant salaries including the Executive Director making a base salary of $263,000 a year plus health care and a lavish travel fund. At the end of the day, these tax dollars need to help every citizen of Washington County, not just a select few.”

Janis echoed those concerns, saying she has repeatedly sought clarity on how hotel tax revenue is being used since taking office.

“In my two years in office, I have looked into where these tax dollars are being spent, and each time I am left with more questions than answers,” she said. “This hotel tax is intended to bring people into our communities and support development, but we are not seeing those results.

“As county leaders, we believe we deserve transparency and accountability. I think we can all agree that tax dollars should be under the jurisdiction of elected officials, officials who can be voted out of office, not bureaucrats who answer to no one.”

The Washington County Tourism Promotion Agency strongly opposed the vote.

In a statement released after Thursday’s meeting, President Jeff Kotula said the agency was “shocked” commissioners advanced an ordinance that would reduce funding for tourism promotion and community events.

He noted that while the solicitor agreed the previously proposed increase to the treasurer’s administrative fee conflicted with County Code, Kotula believes the remaining provisions of the ordinance also violate state law.

Kotula said the agency expects the solicitor’s ongoing legal review to conclude the ordinance directly conflicts with Pennsylvania County Code and warned that adopting it could expose the county to litigation.

“We were shocked that the commissioners voted to advance a revised hotel tax ordinance that will strip funding from the tourism agency and local community events,” Kotula said. “When we heard today that the county solicitor agreed with one of our assertions that the increase in the treasurer’s administrative fee originally proposed in the ordinance violated County Code, we were hopeful he would also determine that the remaining provisions of the ordinance are illegal.

“However, it is early in the process, and we are certain that as the county solicitor continues his legal review, he will advise the commissioners that the entire ordinance directly conflicts with the language of the law and would not recommend enacting an ordinance that could draw the county into a lawsuit because it was illegal from the start.”

He also pushed back on claims of a lack of transparency, saying the agency has consistently followed state law and maintains a clean audit record.

“There were also several TOURISM •A4

“We are certain that as the county solicitor continues his legal review, he will advise the commissioners that the entire ordinance directly conflicts with the language of the law and would not recommend enacting an ordinance that could draw the county into a lawsuit because it was illegal from the start.”

JEFF KOTULA

PRESIDENT, WASHINGTON COUNTY TOURISM PROMOTION AGENCY discussion points today concerning transparency,” he said. “From day one we have been transparent and are proud of our clean audit record. We will continue to follow state law.”

Maggi voted against the ordinance and said he believes the effort violates state law and continues a pattern of targeting the county’s tourism and economic development organizations.

Maggi said this marks the second time in a month that Sherman and Janis have moved to cut programs tied to the Washington County Chamber of Commerce and Tourism Promotion Agency.

In November, the board voted 2-1 to cancel the county’s long-standing contract with the chamber, a decision Maggi said left Washington County as the only county in Pennsylvania without a formal program to attract jobs and business investment.

He also warned the ordinance would redirect hotel tax dollars away from volunteer- run events such as the Washington County Agricultural Fair, the PONY League World Series, the Covered Bridge Festival and the Hickory Apple Festival, placing funding decisions directly in the hands of commissioners. Both the chamber and tourism agency are governed by independent boards made up of business and tourism professionals.

“I am very disappointed that my colleagues are using back-door tactics to try to dismantle a very efficient and fair system of distributing tourism money throughout Washington County,” Maggi said, noting that the current structure has been in place for more than 15 years. “I have grave concern over the county’s attempt to grab total control of an agency’s money.

“As I call upon my colleagues to be up front with how they are spending opioid money, I do not think it is wise to give county politicians control of tourism money to make decisions behind closed doors.”

Maggi also questioned whether commissioners have the authority to change the ordinance at all.

“I reviewed the section of the County Code that our solicitor says will allow us to change how the hotel tax is collected and distributed, and it is pretty clear that we, as commissioners, do not have the power to do that,” Maggi said. “All counties in Pennsylvania are created by the state, and state law says the county treasurer collects the tax, which is given directly to the county tourism agency. We have no ability to direct where the money goes as state law supersedes local ordinances. I am asking our county solicitor to provide a written opinion on how he believes we are not violating the law. We are already wasting tens of thousands of taxpayer dollars on two lawsuits with the chamber and tourism, and we do not need another one.”

With the ordinance now moving forward, Sweat is expected to continue his legal review and finalize draft language.

Any revised ordinance would require a public hearing before returning to the board for a final vote on adoption.