City discusses entertainment tax, other ways to increase revenue, and union-contract related general fund transfers

Marietta City Council Ward 1 Councilman and Finance Committee Chair Michael Scales, right, speaks about transfers related to moving money from the city’s general fund to other funds to cover salaries and personnel benefits associated with the city’s new union contracts while Ward 2 Councilman Bret Allphin takes notes during a Finance Committee meeting Monday evening. Council also discussed ways to increase the city’s revenue. (Photo by Michelle Dillon)

Marietta City Council discussed possible ways to increase city revenue and talked about union contract related general fund transfers Monday evening during a Finance Committee meeting.

The first idea council discussed for increasing revenue was an entertainment tax.

“Mr. Bertram, you’re on about the entertainment tax,” Ward 1 Councilman and Finance Committee Chair Michael Scales said during the meeting.

City Law Director Paul Bertra said Ohio Revised Code Section 715.031, allows a city to levy a tax on “amounts received for admission to any place” and that’s what is referred to as the “admission tax or entertainment tax.”

Bertram said he sent council members a copy of the city of Berea’s entertainment tax ordinance, which set the tax at 3% and he wants them to review it and then there can be a discussion at a finance meeting.

According to Bertam, the tax can range from .05-8% and the average rate of the tax in the state is 3%. He said the city can pick how much the tax would be.

“It would apply to Peoples Bank Theater, the Adelphia (Music Hall), the Adelphia (Summer) Concert Series,” Bertram said. “It can apply anywhere where there’s a charge of admission. There are certain charges of admission that you probably don’t want to apply it to, like high school basketball, football, baseball, things of that nature.”

“What about (the Mid-Ohio Valley Players) that’s completely nonprofit,” Ward 4 Councilwoman Erin O’Neill asked Bertram.

“You have the power to be able to say what admission is, what admission is not, by definition,” Bertam said.

“You could exclude certain things. College football, baseball, basketball games, can be put into that, it could be excluded. Things like comedy clubs, most of those are inside admission. Anything that involves the making of money, not not-for-profits normally.”

Bertram said Berea’s entertainment tax ordinance includes places such as “theaters, dance halls, amphitheaters, auditoriums, stadiums, athletic pavilions, fields, baseball, athletic parks, circuses, sideshows, swimming pools, outdoor music parks and any attractions such as merry- go-rounds, ferris wheels, dodgems, roller coasters, observation towers or amusements operated for profit. They specifically say (the) county fairgrounds.”

He said Berea’s ordinance exempts things like education, religious and charitable organizations and organizations that benefit the military, police, fire or the general revenue of a city. He gave an example of something that would benefit the general revenue of a city, such as a softball game where the proceeds go to a city’s recreation department.

Ward 3 Councilman Bill Gossett asked about the Washington County Fairgrounds and whether they would be included in an admission tax.

“I would say that it could apply, but you may not want it to apply,” Bertram said.

Ward 2 Councilman Bret Allphin asked whose idea the entertainment tax was and who put it on the meeting agenda.

“Mr. Bertram asked to put it on the agenda,” Scales said.

Scales said he asked people to bring him ideas about revenue generation.

“It’s an idea,” Scales said. “It’s out there. All the council members have heard it. We’re not making a decision on it tonight.”

Scales then brought up another revenue generation idea, mandatory income tax filing.

“What that means is everybody has to file an income tax form, like most other cities in the state of Ohio,” he said. “And in doing so they increased their revenue.”

Scales thanked Allphin, At-Large Councilman Harley Noland and At-Large Councilman Ben Rutherford for talking about the idea in the first place.

Noland asked Scales to clarify what he means by mandatory filing and Scales said it means that anyone who works or lives in Marietta would have to file an income tax form even if their income is exempt from the city’s municipal income tax.

“I’ve known people that just didn’t realize they’re supposed to pay … My feeling has always been, not the right number of people are paying,” Allphin said.

Scales asked council members to think about the idea and said he hopes to have a discussion with council, the city treasurer and the city income tax administrator once At-Large Councilwoman Cassidi Shoaf’s empty seat is filled and no one is on vacation.

Noland suggested another way to increase revenue, stating he had talked to Marietta-Washington County Convention and Visitors Bureau Executive Director Deana Clark about AIR BNBs and regular BNBs not paying their hotel/motel taxes.

He said it is a county-wide issue and there are services that somehow watch online reservations for AIR BNBs and for a fee they report the information and the CVB would pay the fee. He said this would increase their revenue which would in turn increase the city’s revenue since the tax receipts are split 50/50 between the city and the CVB.

Noland said he would look into the issue further.

Scales also briefly mentioned transfers from the general fund that need to be made that are associated with the new union contracts the city approved in the spring. The transfers were first mentioned during a Finance Committee meeting June 11, during which some council members expressed concerns about only receiving the transfers the day of the meeting and that the transfers would eat away at general fund savings associated with a mayoral plan to cut city spending that was necessitated by a negative performance audit.

“Just an update, I’m going to introduce the mayor’s request for transfers and appropriations to meet the union contracts,” Scales said.

He said the transfers would be divided into two sections, one for the transfers from the general fund and the other for transfers from other funds and the general fund transfers are “at this time okay.”

According to Scales, the transfers will be introduced at a council meeting on Thursday and will be voted on during the first August council meeting.

Scales closed the meeting by commenting on the city’s efforts to cut spending and increase revenues. He said the administration needs to work on how to increase revenue that is due to the city and “at the same time the administration needs to be looking at reducing our expenses so we can have them both balance out at the end of the year starting next year.”

The next city council meeting is 7:30 p.m. Thursday in Room 10 of the Marietta Armory.