BCT Editorial – 8/27/07

This page was last updated on August 27, 2007.

No contest; Editorial; Beaver County Times; August 27, 2007.

Below is a detailed critique of the subject editorial.

“You don’t have to be a free-enterprise alarmist to be concerned about a recent decision by state Commonwealth Court.

“In a 2-1 ruling, the panel ruled that Erie County can use a 5 percent room tax to finance a 205-room hotel at the city’s new Bayfront Convention Center. The convention center opened this month, while the hotel is still under construction.

“The Associated Press reported that 80 percent of the revenue generated by the room tax goes to pay for the construction of the hotel. The remainder goes into a fund used to boost tourism.

“In effect, private hotels in Erie County are being forced to subsidize a competitor, one that has the built-in advantage of being located at the convention center.

“The county and the Erie County Convention Center Authority argued the center will help all hotel owners in the long run, even with its publicly funded hotel, and the court bought that argument.

“Kent Maynard Jr., an attorney for the private hotels, summed up what was wrong with this ruling.

“‘If you’re going to make me compete with the government, a body that has almost unlimited taxing authority, at least don’t make me collect the money for them.

“The bottom line is this is just another instance of government getting bigger and individuals getting smaller.’”

[RWC] The editorial makes it sound like this problem is something new. In fact, it’s been going on since government first began providing financial incentives to businesses to locate somewhere. The only difference in this case is that the situation is much more “in everyone’s face.” Does it really matter if a portion of a business’ income, property, etc. taxes are used to subsidize a competitor instead of a portion of a room tax?

The solution is simple. Quit using tax dollars to subsidize businesses.