Campsites around the state are being considered as another possible source of revenue in the midst of a budget crisis. Legislators have proposed extending a tax on sites, a proposal that has local camp owners up in arms in a sagging economy.
A measure to expand the Rooms and Meals Tax to campsites is part of several provisions in a version of the state budget that passed the House and Senate in the early morning hours of Friday. The measure proposes increasing the Rooms and Meals Tax to nine percent as well as expanding it to include campsites as well, which currently are not taxed.
Sen. Deb Reynolds, D-Plymouth, said the measure was put forward in the midst of extensive discussions on the state budget. Reynolds said there was a $500 million budget hole over the biennium and winter revenue was down $50 million with predictions growing dire and cuts looming.
Reynolds said a number of different measures for expanded gambling were proposed in the Senate to gain revenue without raising taxes or fees in the midst of other proposed cuts in services. Reynolds said the House rejected two previous proposals for expanded gambling as the Senate rejected a House measure with some tax proposals.
After extensive discussions about the budget and revenue in a session that lasted into the early morning hours of Friday, a measure was passed by the House and the Senate that lead to a balanced budget with a modest surplus.
Elements included in that budget included raising the Room and Meals tax to nine percent and, additionally, applying the Room and meals tax to campsites.
“I am aware people are concerned,” she said. “I don’t know at the end of that day whether that’s going to survive.”
Reynolds said the measure, if passed, could bring in roughly $3 million in revenue to the state. She said she felt she had a responsibility to bring a balanced budget but “am I happy that that was part of the mix, no I’m not.”
News of the measure was met with outrage by a number of local camp owners.
Jayne Cohen, president of Jellystone Park in Ashland and Adventure Bound Camping Resorts, said she learned of the proposed tax taking effect on July 1 after receiving an e-mail from another camp owner in another part of the state.
“I do believe this is unfair, not only to me as a campground owner but to the customer,” Cohen said. “I’m going to pass this expense to the customer.”
The average campsite is available for between $59 and $69 and Cohen said the tax will raise the price around $7.
“If you stay a few nights it’s dinner at somebody’s restaurant or taking the kids to an attraction,” she said. “To me money is so tight. I feel like we’re cutting our expenses, we’re tightening our belts, we’re working hard, we’re struggling to make ends meet and wham, with today’s notice, kick somebody when they’re down.”
The campground has nearly 80 cabins that are already subject to the Room and Meals Tax, which is indicated on the brochure. Cohen said the campsite tax will take customers by surprise as there was little forewarning.
“We always tell them ‘it’s X amount of dollars, there’s no tax for you’re site,'” said Jellystone Assistant Manager Michael DiRienzo, who said the prospect of the tax, “It’s not a very good one.”
Cohen’s company also includes Jellystone Parks in six other states with taxes on campsites. However, New Hampshire is known for having few taxes and the fact there are no taxes on campsites is a major draw for customers, especially those from other states. New Hampshire residents are also not used to having such a tax and Cohen said it would hid hard in that respect as well.
Additionally, the nine percent tax will be higher than the taxes in any of the other states where Cohen has campgrounds.
Cohen said the tax will be a major issue, especially as it will take effect before the Fourth of July weekend, which is one of the biggest weekends for the campground.
“They’re paid in full and they’re going to get up here and we’re going to say ‘You owe nine percent more,” Cohen said.
Cohen said Jellystone’s numbers are down this year due to the economy and the rainy weather. Customers make reservations for the campground, which have been down and Bike Week saw “tons of cancellations” due to the weather.
“I’m going to have to sit down and make a business plan for this if it goes into effect,” Cohen said, saying it will be up for discussion how the tax will be handled, including if the campground will absorb it for customers for any period of time.
Cohen said she is opposed to a tax on campsites, but said it would be more workable if introduced with more notification and on a graduated basis.
“Obviously we think there are some major problems with that,” said Jon Mackie, co-owner of Clearwater Campground in Meredith. “Campsites are not taxed, to just jump right to nine percent is going to add a huge burden on customer’s vacations.”
Mackie said he doubts the logistics of being able to collect that tax under such short notice.
“Anytime you add nine percent to the cost of someone’s vacation, it’s going to negatively impact their decision on whether to come to New Hampshire.”
Mackie said he will help work toward having the measure defeated.
Reynolds said the proposed tax is not set in stone and will be looked at “very carefully” between now and the next budget session on Wednesday. Reynolds said, as a Senator in a tourism-rich area, she understands the impact this will have for constituents and is factoring that in her considerations.
“We certainly do not want to do anything to hurt (camp owners),” Reynolds said. “There is almost no additional revenue source than expanded gambling that we could consider. We’re still all of us considering the various components of the budget and we’ll have to see whether or not that part of it will survive. We’re getting to a point (where) we have limited options and there is almost no tax that anybody can consider that isn’t going to cause some angst and unhappiness in some part of the state.”
Reynolds said that other parts of the budget also include “some very severe cuts” including laying off state employees, closing the Tobey School in Concord and other difficult measures.
The state budget will be discussed again on Wednesday, June 24.