La Crosse could have Wisconsin’s highest room tax

La Crosse property taxes may soon be increasing to pay for renovations to the La Crosse Center.

To prevent that from happening, Mayor Tim Kabat wants to increase the city’s room tax by 50 percent, but not everyone agrees with that decision.

The room tax applies to hotel rooms in the city.

The current tax is 8 percent but the mayor would like to increase it to 12 percent.

If that happens, La Crosse would have the highest room tax in the state and some critics argue that could hurt the city’s tourism.

AJ Frels the Executive Director of Explore La Crosse said, “Obviously impacts, merchants, restaurants, every type of sales you can think of.”

Visitors spend more than a quarter billion dollars in La Crosse County every year.

But the Convention and Visitors Bureau is worried an increased room tax could decrease visitor spending.

“We want to make sure that this percentage, whatever he proposes, would not put us in a situation where it’s making it harder to book business bring conferences in and so forth,” Frels said.

Because many visitors would be using the center, Kabat thinks it makes sense for them to help pay for it.

“I do think it’s a very fair approach to have a big part of the financing plan or have room tax be a part of that because I feel like you’re having the users and the folks that are benefiting help contribute to the cost of building this very important project,” Kabat said.

If the room tax doesn’t increase, the city says it may have to raise property taxes.

“We know that if we’re going to borrow about $35 (million) to $36 million over 20 years the annual debt payment on that is $2.7 million. If we just did that all on city of La Crosse taxpayers that would cause our property tax rate to go from $12.04 to $12.72 and that really has me concerned,” Kabat said.

If the room tax increases to 12 percent, the city says property taxes would only increase from $12.04 to $12.28 per $1,000 of assessed value.

“So if we did a room tax and increased it from 8 percent to 12 percent that would generate about $1.3 million a year, which would reduce our debt payment then from $2.7 (million) to $1.3 (million) somewhere in that range, which would help keep our property tax rate more level,” Kabat said.

Even though the mayor and Convention and Visitors Bureau disagree, they’re both willing to compromise.

“I don’t want to set up a big battle and make this negative. I want to try and come together in a consensus,” Kabat said.

“We’re looking forward to having conversations with mayor and the city and finding the number or the percentage that is right for La Crosse at this time,” Frels said,

The city is also looking at other ways to pay for the La Crosse Center renovations.

They’re considering, a ticket surcharge, tax increment financing, working with the county and even working with private donors.

The city says the La Crosse Center currently brings in around $38 million to the community. Once the renovations are complete, they estimate it will bring in an additional $8 million to $9 million.

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