Vermont Senate Finance Committee raises overnight occupancy fee

State House dome, Montpelier. Stock photo.

REGION – The Vermont Senate Finance Committee on Thursday approved a $2 overnight occupancy fee, defying Republican Gov. Phil Scott’s request for no new taxes and fees this year.  The vote came as the governor has been wrangling with House members over his repeated requests for no new taxes and fees.

In the final hours leading up to the Vermont House’s pending vote on a contested state budget plan, the Senate Committee on Finance just upped the political ante.

Committee members, led by Chairwoman Ann Cummings, D-Washington, voted 5-1-1 to raise $7.2 million from a $2 per-night occupancy fee on lodging. The fee is being proposed to help narrow what began as a $72 million dollar budget gap.

“Vermonters would share the actual burden of this tax increase as it will impact the cost of weddings, special events, overnight stays, and more,” Scott said Friday in a statement.

Vermont’s family-owned inns, according to Scott, are fighting to keep their doors open, especially as inexpensive Airbnb options are on the rise in resort areas such as Stowe and Killington. They also face pressure from the Green Mountain State’s variable weather and a business-unfriendly permitting process.

“This tax will unnecessarily increase the cost of hotel and motel stays, straining our tourism sector, which contributes $2.5 billion to our economy annually,” Scott said.

State Rep. Heidi Scheuermann, R-Stowe, a member of the House General Affairs Committee, predicted the fee would harm the state’s tourism industry.

“I grew up in Stowe, where there are lots of hospitality businesses,” Scheuermann told Watchdog recently. “It’s a challenging industry, and the higher the costs to the industry, the more challenging it will get.”

Stowe, a community at the heart of the state’s four-season tourist industry, is famous for its year-round resorts, motels, bed and breakfast establishments, dining and gift shopping.

Rob Roper, president of the Ethan Allen Institute, a free-market think tank, blasted the Senate Finance Committee vote. “It’s colossally stupid. How about a tax on maple syrup next?” he said.

Scott suggested that Senate leaders were playing politics, since committee members attached the $2 fee requirement to two Senate bills (S.99 and S.100) promoting affordable housing and development projects crafted to grow the state’s economy.

“This legislation had tripartisan support, with broad recognition of the need to make housing more affordable across the entire housing continuum,” Scott said.

Rebecca Kelley, the governor’s spokeswoman, also criticized the move, reiterating that “Gov. Scott has made absolutely clear he will not support new taxes and fees that make Vermont less affordable.”

This article was written by Lou Varricchio, the Vermont bureau chief for Vermont

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