2014-03-27 / Around Town

Finance Panel IDs $250,000 in New Revenue

By Tom Shevlin

The city’s ad-hoc Finance Review Committee is asking city leaders to embrace a pair of action items that they say could generate an additional $250,000 in new revenue.

Writing to update the council on their progress, members of the committee have recommended the city adopt two “immediate action items” aimed at boosting existing revenue streams through increased or expanded fees.

The proposals are meant to represent “low hanging fruit” and were among six concepts reviewed at the committee’s March 13 meeting.

Of the original proposals, all but two were referred back for further research and development with the understanding that they could be reconsidered for the committee’s final May report. The council has been asked to endorse two: an increase to the city’s cruise ship landing and boarding fees; and a statewide proposal to apply lodging and sales tax for bed and breakfast inns.

Both proposals would need State House approval before taking effect.

Meeting for the first time in November and 10 times since then, the Finance Review Committee has been leading a council directive to identify new potential revenue streams and cost savings. For the past several months, they’ve trained their eye toward six key areas: city services, long-term planning/ governance, not-for-profit organizations, salaries and benefits, schools, and tourism.

Their first two proposals focus on tourism.

Currently, Newport collects $2 for each passenger who disembarks from the dozens of cruise ships that visit the harbor in the fall and late spring months. As the committee notes, those fees haven’t increased since 1999.

“The Newport City Council should request the Rhode Island General Assembly to increase the fee by $1 per passenger for landing and $1 per passenger for embarking with the new rates to take effect 18 months after approval,” the group recommended. “Based on 2012 total cruise ship traffic, the increase could result in additional estimated annual revenues of $150,000.”

A prior proposal for the same increase had been considered in previous budget plans, but was dropped out of concern over the lack of a time delay in the effective date of the increased fees. “The cruise ship lines want time to incorporate the increased fee in their passenger ticket charges,” the Finance Review Committee noted. “The increased fee is in keeping with those charged by comparable ports along the northeast coast.”

Last year, Newport generated just under $300,000 from cruise ship visits, with an estimated 75,000 passengers visiting Newport Harbor over the course of the season. With over a decade of building the city’s brand as a port destination and last year’s improvements to Perrotti Park complete, the committee sees now as a good time to increase the fees associated with those visits.

Likewise, the committee is recommending that the council pass a resolution supporting a proposal currently making its way through the General Assembly that would extend the state lodging and sales tax to all bed and breakfasts – both traditional and non-traditional.

“Discover Newport estimates additional revenue to the city would be approximately $100,000,” the committee contends, reflecting the portion of the state’s five percent lodging tax that Newport receives, as well as an additional one percent tax that the city collects. “It appears there could be about 150 rooms added for the collection of the hotel tax,” they add, noting that there are also numerous unregistered properties around the city that could also qualify as B&B’s.

“Passing a resolution to support Rhode Island budget changes in the lodging and sales tax is a plus for both the city and the state. The state will receive more revenue in sales and lodging tax and the city likewise will benefit from the change in the law.”

In both cases, Finance Review members stressed that timing is of the essence. “The urgency comes from there currently being a window of opportunity to act,” they wrote. “If action is delayed, there will not be another window of opportunity until spring 2015 at the earliest. Both proposals could result in significant enhancement in annual revenue.”

In their status report, the group noted that since taking charge of their duties, all of the city’s top elected and appointed officials, department heads, and most senior administrative personnel have been interviewed by at least one of the teams. So too have representatives from Discover Newport, the Newport County Chamber of Commerce, the Aquidneck Island Planning Commission, Preservation Society of Newport County, Salve Regina University, Rhode Island Department of Education, Rhode Island Taxpayers Association, the City of East Providence Finance Department, and others.

The Finance Review Committee is due to release a full and final report detailing further strategies for enhancing the city’s coffers in May – just in time for the council to incorporate their suggestions into this year’s budget deliberations.

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