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Duluth Institutes Tourism Tax to Help Project Funding

Updated: 07/14/2014 10:42 PM
Created: 07/14/2014 10:06 PM WDIO.com
By: Briggs LeSavage
blesavage@wdio.com

The Duluth City Council voted unanimously Monday night to institute a half of one percent increase on food and beverage and hotel-motel taxes in the city. 

This comes after the state legislature authorized the half percent increase earlier this year. The legislature also put $5 million toward improvements at Wade Stadium and Spirit Mountain in this year's bonding bill. 

"The City was very fortunate in this year's bonding bill from the state to get over $5 million  to help preserve and make improvements to Wade Stadium and also to allow Spirit Mountain to snow make with water from the St. Louis River, which will significantly reduce their operating costs," City Councilor Joel Sipress said. 

The additional funds gathered from this tax increase will be geared toward those same improvement projects. 

Under the new tax increase, a $100 dollar hotel room will cost 50 cents more and a $10 restaurant tab will cost five cents more. 

"The reason that we fund these sorts of projects out of this tourism tax is it’s a way to make sure people who visit the city help cover the cost of the things that we build for our visitors,' Sipress said.

He said the council recognizes that many Duluth residents are patrons of these businesses as well.

"Between the food and beverage tax and the hotel-motel tax, we do get a lot of money from people who come to our city to help pay for things that not only benefit visitors but things like Spirit Mountain and Wade Stadium that are very important to local residents," Sipress said.

Eyewitness News called around to about a dozen Duluth restaurants and hotels. While some general managers weren't available for comment by news times, Holiday Inn and Suites General Manager Gerry Goldfarb said he supports the tax increase.

"Anything we can do to attract new and exciting changes in West Duluth is good for all of Duluth," Goldfarb said.

Brain Daugherty, president of Grandma's Restaurant Company echoed those sentiments.

We do believe this is a good project, and we do support this ... It takes a lot of planning and prep work for us to support a tax increase," Daugherty said. 

Sipress said for now, these tax dollars can only be used to fund projects at Spirit Mountain and Wade Stadium. He said the council plans to have a committee of the whole meeting in the coming weeks to discuss funding for more improvements to the West Duluth area. 

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