Council split over hearing on hotel tax

FRONT ROYAL – A divided Town Council voted Monday to hold a public hearing on a proposal to cut the lodging-tax rate.

But council doesn’t plan to take action on the proposal at the time of the hearing.

Council voted 4-2 on a motion to authorize town staff to schedule a public hearing on a proposal to lower the lodging tax rate from 6 percent to 2 percent of net sales that would make Front Royal’s levy equal to the county’s. Councilman Bret Hrbek made the request to schedule the hearing with the idea that they would act on the proposed reduction at the same time.

Vice Mayor Hollis Tharpe said he didn’t think council should hold a public hearing before they discuss the matter at a work session. Tharpe said council did not have information on the idea but noted that such a reduction could mean a loss of about $200,000 in tax revenue.

Councilman John Connolly said he hadn’t heard of any plan by which the town could close the revenue gap. Connolly asked that council postpone action on Hrbek’s motion until a future meeting.

“I do like to reduce taxes but I like balanced budgets a little bit more,” Connolly said.

Councilwoman Bébhinn Egger said they could approve Hrbek’s motion and then discuss the matter at a work session before the hearing. Mayor Timothy Darr said council might need to hold multiple hearings on the same issue.

Tharpe added that he did not oppose holding a public hearing but felt they needed more information. Councilman Eugene Tewalt said he would support the motion to hold a public hearing but not a tax reduction.

“I’m willing to listen to the public but I’m not willing to take out $300,000 out of the budget this year,” Tewalt said.

Connolly, Tharpe and Councilman Daryl Funk voted in favor of the motion to postpone a vote to hold a public hearing on Hrbek’s proposal. Egger, Hrbek and Tewalt voted against the motion. Darr broke the tie by voting against the motion to postpone action on Hrbek’s proposal.

Hrbek then amended his original motion to authorize the town to hold the hearing at council’s second meeting in November and take action at that time. The motion failed on a 4-2 vote.

“This is playing politics with our budget and an attempt to upset the direction council has chosen to go in,” Funk said.

Egger said she wanted to hear from the public on the proposal and noted that council’s approval of an agreement with Warren County over the U.S. 340-522 Corridor and utility service to Crooked Run West changed the situation. The approval also allowed a proposed Marriott hotel to move forward, Egger said.

Council then voted 4-3 on Tewalt’s amendment to Hrbek’s motion that they hold the hearing and discuss the proposal rather than take action. Darr, who cast the tie-breaking vote, said he wouldn’t support changing tax rates in the middle of the fiscal year or without a plan to make up the lost revenue but he did want to hear from the public.

Council ultimately voted 4-2 on the amended motion to schedule a public hearing on Hrbek’s request and to discuss the matter. Connolly and Tharpe voted against the request.

During the public comment period earlier in the meeting, local hotelier Stan Brooks Jr. urged council to hold a public hearing on a proposal to lower the lodging tax in town, connecting the matter to the ongoing debates over the corridor.

Also at the meeting, council:
• Heard from Warren County resident Linda McDonough voiced concerns during the public-comment period about an apparent lack of signs at crosswalks advising motorists to yield the right-of-way to pedestrians. Town resident Linda Allen again criticized council for its recent approval of the new corridor agreement with the county.

• Approved on first reading a request by Angel’s Korner Daycare for a special-use permit to expand their business into other units within the building known as Commerce Square at 629 Commerce Ave. Rose Mary Comstock, a co-owner of the day care, spoke during the public hearing on the request. The business needs to expand to meet demand, Comstock said.

• Adopted on a second and final reading an ordinance that reduces fines of parking violations but doubles the levies if not paid within a certain time.

• Met in closed session to discuss the potential disposition of the former Afton Inn property on Main Street. The Front Royal-Warren County Economic Development Authority owns the property and is marketing the property.

Contact staff writer Alex Bridges at 540-465-5137 ext. 125, or abridges@nvdaily.com

This story published Tuesday should have stated that a proposal calls for a reduction in the lodging tax from 6 percent of net sales to 2 percent of net sales.