Arlington, VA

Arlington County Board members are still figuring out what to do now that much of the county’s tourism promotion budget has been effectively slashed by the Virginia General Assembly.

Last week a bill that would have renewed the county’s 0.25 percent tax surcharge on hotel rooms — a tax that had the support of the local hotel industry — failed in the House of Delegates. The defeat was attributed to Republicans retaliating against Arlington’s HOT lanes lawsuit.

The tax surcharge brings in nearly $1 million each year, which is used to promote Arlington’s $1 billion tourism industry. The surcharge will expire at the end of the year.

County board member and possible state Senate candidate Barbara Favola says the board hasn’t decided yet whether it will replace the lost revenue. If it does, the money will have to come from the county’s general budget.

“It doesn’t make much sense to me,” Favola said. “This tax is paid by out-of-state people… If Arlington is going to continue this level of marketing, we’re going to have to raise the tax rate on Virginia residents.”

“It really was extraordinarily irrational,” Favola added, noting that Arlington tourism generates $58 million in annual tax revenue for the state. “I would think that having a dedicated tax… is financially in the state’s best interest.”

The lost tourism revenue will now have to “compete with all other county budget priorities” when Arlington’s FY 2012 budget comes up for adoption in April.

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