A controversial proposal to increase bed taxes in Mahoning County and use the money generated for economic development activity by the Western Reserve Port Authority is allowable under Ohio law, the port authority's legal counsel said in response to questions raised by a port authority board member.
Mahoning County's proposal to increase the lodging tax by 2 percent generated controversy when local hotels objected, and now port authority board member Andres Visnapuu has sought clarification on how the money may be spent before commissioners act.
''I am of the opinion that a port authority that operates a joint-use military facility can receive bed tax money, and the statute provides for this. It can be paid to the port authority for its operations,'' attorney Dan Keating said. ''I take that to mean the port authority operations.''
Similar reasoning can be applied to Trumbull County's decision in 2010 to increase the bed tax, Keating said.
Commissioners had agreed to the 1 percent increase in 2010, taking Trumbull to the maximum 5 percent allowable by law, raising the amount dedicated to the port authority from 2 percent to 3 percent.
It was explained at that time by the port authority, which operates the Youngstown-Warren Regional Airport, that the additional funding would be used on infrastructure improvements at the facility in Vienna and to pay on debts to vendors.
Commissioner Paul Heltzel said Wednesday he doesn't recall issues being raised about how the money would be spent.
In Mahoning County, how the money would be spent is at issue, in particular whether it may be used by the port for economic development.
Keating and Mahoning Commissioner John McNally IV say they believe it can.
''I'm very comfortable with it. It's been reviewed by our prosecutor's office. We've had discussions,'' McNally said. ''I don't consider it an issue.''
But port authority board member Andres Visnapuu wants the Ohio Attorney General's Office to clarify its April 2011 opinion indicating whether commissioners can add the 2 percent tax and that the money can be used for economic development. Visnapuu said he wants something that ''makes absolutely clear what activities are eligible, what activities are not,'' he said.
''I would like to emphasize I'm not trying to make trouble, I'm trying to avoid trouble ... an ounce of prevention is worth a pound of cure, that's my philosophy,'' Visnapuu said.
With the money it has now - about $360,000 - the port authority's economic development budget will last about 21 months without some new source of revenue.
When the port's economic development arm was created and Executive Director Rose Ann DeLeon was hired, it was funded by contributions from both counties, the cities of Warren, Niles and Youngstown, and the Western Reserve Building Trades Council.
Moving toward the bed tax as a funding source would relieve those sources from contributing money.
The issue was raised by Mahoning commissioners in February, but tabled after opposition from hotel managers, who said the increase would drive away business. Public hearings have been suggested on the issue. They would likely be held sometime this month.