La Crosse’s room tax or property taxes will likely soon be highest in city history

The city of La Crosse will soon either have the highest hotel room tax in the state or the highest property taxes in city history.

That’s the difficult choice the city has to make in order to pay for the La Crosse Center.

We looked at how this decision could impact the local economy and your wallet.

The current room tax in La Crosse is 8 percent. The mayor would like to see that number go up to 11 percent, which would be the highest rate in Wisconsin, and some local businesses are worried that would deter tourists.

If the room tax doesn’t substantially increase, however, the city says it will have to raise property taxes to help pay for the proposed $42 million expansion of the La Crosse Center.

“There’s no easy answer to any of this,” La Crosse Mayor Tim Kabat said.

Kabat is hoping the city will agree to raise the room tax from 8 to 11 percent.

“I feel the 11 percent is a very reasonable approach. It’s balanced. We’re still going to need to slightly increase our property tax rate,” Kabat said.

If the room tax is increased to 11 percent, property taxes will only be increased by around $30 for a $100,000 home.

If the room tax isn’t increased or if it’s increased to 9 percent, which is what Explore La Crosse is proposing, property taxes would increase more than $50 for a $100,000 home.

“That actually would be the highest property tax rate that the city has ever had. So we’re very much concerned about that,” Kabat said.

A.J. Frels, executive director of Explore La Crosse, said, “The executive director of Explore La Crosse said if La Crosse increases the room tax too much, tourists will simply stay at a hotel in a neighboring city to save money.”

“My biggest concern is that we are going to price ourselves out of a market,” Frels said.

If that happens, Frels said, several local businesses will lose foot traffic and the city’s economy will suffer.

“It can be a yarn shop a clothing shop. It can be the ice cream parlor. It can be a variety of different businesses that are affected by it,” Frels said.

Frels said the county brought in more than a quarter billion dollars from tourism last year and they don’t want to do anything to impede that.

The mayor agrees, but still thinks increasing the room rate to 11 percent is the best solution.

“We don’t want to do anything obviously to stop the momentum, because we do have a lot of great things happening in our community and downtown, and tourism as well, but at the same time have to figure out a way to pay for this project,” Kabat said.

Explore La Crosse thinks increasing the room tax from 8 percent to 9 percent would be a much better solution than 11 percent.

Kabat on the other hand, doesn’t believe raising the room tax to 11 percent will have a major effect on tourism. He said worst-case scenario the City Council can always vote to lower the room tax rate again.

The City Judiciary & Administration Committee is voting on this Tuesday night and depending on what it recommends the issue will go to the City Council next week.

UPDATE: The The City Judiciary & Administration Committee vote was referred for 60 days Tuesday night.

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