In March, the Ulster County Legislature passed a resolution for a home-rule request to the state legislature to increase the county’s occupancy tax rate from two percent to four percent. Sometimes called a “bed tax,” the occupancy tax is levied on all hotel, motel, and short-term rental stays, and is common throughout the state. Our neighbors all have occupancy tax rates at least double that of Ulster County: Dutchess County has had a four percent occupancy tax rate since 2004; Orange and Sullivan counties both have an occupancy tax of five percent and continue to see growth in visitor spending. I agree with the county legislature that we are long past due for a sensible tax rate that better aligns with our neighbors, but we must guarantee that any new revenue raised is invested in priorities that will serve our residents and local businesses, and not simply deposited in the general fund for any purpose.
Two areas of investment in particular will help our residents with affordability while supporting tourism and a thriving local economy: housing and transportation. Both require a sustained investment over time and both make sense to help fund with dedicated occupancy-tax revenue.
There is no disputing that we face a housing crisis in Ulster County. We simply do not have enough housing that our residents can afford, and the situation is desperate for many families and seniors. One in three renters in Ulster County spend more than half their income to keep a roof over their heads, leaving them with too little to pay for food and the other necessities of life.
It’s not just our residents who suffer. Our businesses suffer, too. The single greatest complaint I hear from the business community, including those in the tourism industry, is the difficulty of finding workers, and that’s in good part because of the disconnect between what they can pay those workers and what it costs to live he
In my State of the County address in February, I proposed we create a county housing fund with an initial investment of $15 million of the county’s current surplus to catalyze the development of housing that people can afford. This fund would work hand-in-hand with a countywide land bank, which the legislature has started the process to create. If we also dedicate to the fund the revenue from one percent of the occupancy tax (approx. $1.5 million annually), we can ensure a sustained investment to help meet this most basic need for years to come.
Dedicating a portion of annual occupancy tax revenues to housing makes a lot of sense, especially given that a good part of this tax revenue comes from short-term rentals, which have contributed to the current housing shortage.
Another one percent of the occupancy tax increase should be dedicated to transportation. The additional $1.5 million in annual revenue would more than cover the costs of offering UCAT bus service for free to residents and visitors, as we are now doing, and the balance of funds can be dedicated to support for expanded service. This is another one of those investments with multiple benefits to communities and the economy — providing an affordable way for residents to get around, for workers to get to work, and for visitors to explore our county. And importantly, public transportation is good for the environment and air quality, especially as the county continues to electrify its bus fleet. (And by the way, if you haven’t ridden UCAT’s electric buses, you’re in for a treat? Tthey are an exceptionally smooth ride!)
Dedicating the two percent occupancy tax increase to housing and transportation will ensure that revenues raised from visitors to Ulster County will be used to support the residents and local businesses of Ulster County. Together, we can create a sustainable, resilient, thriving Ulster County that leaves no one behind.
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