The Bed Tax

Mayor Bloomberg today plans to announce ideas for financing an expansion of the Jacob K. Javits Convention Center on the far West Side of Manhattan. It's unclear what he'll propose, but one idea making the rounds in hotel industry circles is a $2 a bed tax for a night in a New York City hotel room.

We're not in principle opposed to an expansion of the Javits Center, but funding it with a new tax on hotel users is such a bad idea that it's worth stopping before it gets any further.

To begin with, it's bad business. Christine Quinn, a City Council member who represents District 3 on the West Side, told The New York Sun, "It seems slightly counterintuitive that we would generate more traffic in hotels by raising the cost." Henry Kallan, whose HK Hotels chain includes the Library Hotel and the Hotel Giraffe in Manhattan, tells us, "As a customer at a hotel, I would question why I should spend an additional $2 for every day in New York to help fund an expansion here."

Las Vegas, perhaps the most successful city at attracting conventions, has a 9% tax charged to guests on the price of hotel rooms. New York's hotel tax is already a steep 13.625%, plus a $2 a room occupancy tax. Adding an additional $2 a bed charge would bring a room tax to near the roughly 21.5% that it was when Mayor Giuliani took office and a national convention management group had an official boycott of New York.

It'd also be bad politics. Mayor Bloomberg's approval ratings plunged after his 18.5% property tax hike. It didn't help that he also added two higher rates to the city's income tax structure, raised the city sales tax by an eighth of a percentage point, and raised the cigarette tax — all with the help of the Democratic-controlled City Council and the state Legislature in Albany, where control is split between a Republican Senate and a Democratic Assembly. His poll ratings started recovering about when he announced that he wanted to start moving the tax arrow in the other direction, starting with a $400 rebate for home-owners hit by the property tax increase.

Visitors to the city are tempting tax targets because they are less likely to make their anti-tax sentiments known against the mayor at the ballot box. But the city's voters know they are so overtaxed already — with the highest state and local tax burden in the nation, according to the Citizens Budget Commission — that another tax increase, even on visitors, would surely be met with well-deserved jeers.