Palm Beach Center Unlikely As Hotel Tax Bill Languishes

When Florida voters put the first Republican majority in more than 120 years into power last November, no one thought the electoral landslide would have any tangible effect on the state's travel industry.

But now, with the legislature in session less than two weeks, the affects appear both immediate and far-reaching: For example, the result of the Republican blood oath to pass no new taxes spells good news and bad news for the meetings industry.

If you're sending travelers to Florida and you're not eager to pay the higher room taxes for hotel stays, it's definitely a welcome, albeit small, relief in a tough hotel market. It's also good news if you plan your venues on the high seas: A proposed cruise-ship passenger tax that had the backing of Democratic Gov. Lawton Chiles is, as one influential Republican committee chairman put it, "DOA as far as this legislative session is concerned."

But the Republicans' attitude about new taxes easily could spell bad news for a long-term effort by Palm Beach County to build its first public convention center, a 300,000-square-foot center financed in part by an increase in the local hotel bed tax from 4 to 5 percent.

The tax, which would affect hotels of 50 rooms or larger in central Palm Beach County, could be imposed only by a majority vote of the Palm Beach County Commission, and now seems certain to die in the legislature this spring. The commissioners have said that without the tax increase, they will not build the $48 million convention center, which Palm Beach County hoteliers have been pushing for more than a decade. Indeed, a plan in 1990 to finance a Palm Beach convention center with a tax increase on restaurant meals died with the governor's veto.

Supporters of the convention center include virtually all the county's elected officials, business and travel communities--and even the 23 hotel properties that would be affected by the tax.

Palm Beach County commissioner Ken Foster, a proponent of the tax and convention center plan, said last week he got "an absolute, unequivocal 'no' " when he spoke with key Republicans in the legislature, including Florida House Speaker Dan Webster (R-Orlando).

Proponents of the tax contend that it would ultimately be more of a help than a hindrance to convention planners because the more meeting space Florida has, the more competitive its cities are with each other, leading to downward pressure on meeting space prices. The supporters predict a possible chilling effect on convention center expansion around the state as long as the padlock on all tax increases remains in place.

Florida state law limits counties to a 4 percent hotel room tax, except for the state's three largest tourism counties--Orange, Osceola (around Orlando) and Dade. Those counties pushed a bill through the legislature in 1995 allowing them to charge 5 percent and have either used or plan to use hotel tax revenues for projects to increase meetings lift.

Orange County has used hotel tax revenue to help finance expansion of the Orange County Convention Center, which has just completed a massive building campaign and will offer 1.1 million square feet of exhibit space by the beginning of 1998. Dade County, the only other county in the state with a 1 million-square-foot convention center, recently used tax incentives to lure the 800-room Loews Miami Beach Hotel (Metings Today, April 22, 1996), which will open next year in what Miami tourism officials call the most significant citywide event for the convention industry in 30 years. But the legislation that allowed Orange and Dade Counties to raise their hotel tax rates, like every other piece of legislation passed in Florida thus far during the 20th century, was passed by a Democrat-majority legislature.

While the proponents of more and larger public convention centers in Florida feel they have a problem with the new legislature, another element of the state's travel industry has reason to rejoice. Two bills to levy a tax on cruise ship passengers appear to be dead in the legislature. One bill, backed by Gov. Chiles, would have attached a $5-per-ticket tax on "cruises to nowhere," the popular, one-day gambling cruises that simply take travelers out to sea so the on-board casinos can open without breaking state laws. The other bill, backed by beach preservation enthusiasts, would have added $10 to all cruise ship tickets, with the estimated $30 million the tax would have raised going to help fix and prevent beach erosion.