June 30, 2015
Dear WH&LA Lodging Member:
With today being the last day for membership renewal for more than half of our lodging members, we would like to remind those who have been contacted to renew by June 30, to send in your renewal right away to ensure you will continue to receive our WH&LA and Capitol Insider publications, along with our marketing and other services.
The following are the most recent updates for you today, keeping in mind that we would need to expand this considerably to cover all the issues that pertain to you, so we are focusing on some key updates.
State Lodging Per Diem Rates
As a reminder, the increased state lodging per diem rates go into effect tomorrow, July 1. Milwaukee, Racine and Waukesha counties state lodging per diem rates increase to $90 (from $80), and all the other counties increase to $82 (from $70).
Today, OSER, the state agency responsible for oversight of per diem rates and communications with state employees, posted the following information pieces that can be utilized by lodging properties to verify to state employees traveling on business that the change begins July 1:
No guidance was issued relating to the honoring of existing reservations at the previous rates.
Tax Parity on the Sale of Overnight Stays
This relates to requiring online travel companies (OTCs - such as Orbitz, Expedia, etc.) to remit sales and room taxes based on the retail price for an overnight stay that the customer pays them, which is what lodging properties remit taxes on. Travel Tech, the national organization representing the OTCs is continuing to lobby heavily in Wisconsin to stop this proposal, which is still under consideration by Joint Finance Committee in the state budget. They have continued to push the spins that have worked in a few other states, and their national CEO managed to convince Wisconsin Public Radio that they represent the travel and tourism industry for a special feature segment yesterday morning at 7:30 am. WH&LA spotted this late Saturday when the WPR programming for Monday was released, so we did our best David vs. Goliath effort with a call in during the show, with Moderator Joy Cardin allowing us a few unscheduled rebuttals against Travel Tech (listen here), while still giving them the last word.
If this proposal does pass Joint Finance, we will need some help in letting the Governor know that this tax parity with lodging properties in our own state is not a new tax, but is a closing of a loophole on an existing tax that OTCs already pay - only they uniquely pay at a lower level. Last Friday, the Tourism Federation of Wisconsin and the Wisconsin Association of Convention and Visitor Bureaus came out in support along with WH&LA.
Wisconsin Sports & Entertainment Center Funding Package
Yesterday, Assembly Speaker Robin Vos released the details on the proposed funding package for the Wisconsin Sports & Entertainment Center (also referred to as the Milwaukee Sports Arena), which includes quite a few changes from the Governor's original budget proposal, which were necessary to gain more support. The state Legislative Fiscal Bureau analysis of the new package provides a 20-page objective summary of the components. Just a few key highlights include:
- The funding includes $4 million per year ($80 million cap) from state GPR, $4 million per year ($80 million) from debt collected from outstanding Milwaukee County receivables, $93 million from a continuation beginning in 2032 of Wisconsin Center District room taxes, F & B taxes, and car rental taxes, when the WCD debt is retired
- The state will pay off $10 million to retire the debt on the Bradley Center, and will provide a total of $6 million over the next two years for final maintenance of the Center
- In addition to their $250 million in funding for the new facility, the Bucks & their affiliates will pay for the demolition of the Bradley Center, and will pay all costs for equipping, maintaining and operating the new arena once constructed
- The City of Milwaukee will pay for construction of a new parking facility
- The current WCD Board appointees will have their terms expire immediately. A new Board, with the Chair being the DOA Secretary until completion of the construction, and with the Assembly Speaker and Senate Majority Leader along with the City of Milwaukee Comptroller and 11 other new appointees appointed within 30 days under the current structure; however, with terms that expire when the construction is certified by the Chair to be completed. The Chair would be authorized to negotiate the development agreement, lease, and non-relocation agreement, without waiting for Board approval. Future amendments and new agreements would require Board approval.
- Once the arena is completed, the same total number of Board members continues, but the compositions would change with five appointments by the County Executive, two by the Mayor, and three by the Milwaukee Common Council President, and the DOA Secretary would remain on the Board, but not necessarily as Chair, along with the Speaker, Majority Leader, and the City Comptroller.
- The new Wisconsin Center District Board would oversee the new arena, the Convention Center, the Milwaukee Theatre, the Panthers Arena, and the Bradley Center until demolition.
This summary does not get into the finer details covered in the 20-page document. While it was claimed that there are sufficient votes in the Assembly for passage, the Senate votes remain volatile, so it is uncertain if this will be included in the state budget or pulled into separate legislative, which would create an entirely different political dynamic for passage.
State School Start Date Exemptions
AB 144 introduced by Rep. Jim Ott, has been scheduled for a Public Hearing by the Assembly Judiciary Committee on Thursday, July 16 (time to be announced later). The bill provides an exemption for up to 40 school districts to the no earlier than September 1 School Start Date requirement, which concerns many who feel this is just the first step to a repeal of the requirement. The Tourism Federation of Wisconsin (TFW) will be arranging for speakers to testify in opposition from tourism businesses around the state. To communicate your opposition in advance of the hearing, send an email to: [email protected] (Committee Chair); and [email protected] (bill sponsor), simply stating that you oppose the creation of new exemptions to the post-September 1 School Start Date in our state as there is already sufficient flexibility in the current scheduling to accommodate the needs of the District and the start date is critical to the tourism industry.
Federal: Administration Releases Overtime Regulations
The American Hotel & Lodging Association (AH&LA) just released their overview of the new Overtime Regulations introduced by President Obama last evening. This would have a significant impact on the lodging industry across the country, so it would be beneficial to read the resources to better understand how this might impact your property.
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