Newport leaders sought to raise revenue through tourism taxes. How those bills fared

While one of the measures the City of Newport hoped to use to boost revenues from the tourism industry passed the General Assembly, two others did not.

“A big focus for us is how we make sure Newport can do the things it needs to do to keep its head above water and keep the city moving without putting the entirety of that burden on residents,” Mayor Xay Khamsyvoravong said. “What we’ve done here is try to devise a couple of different ways to help raise revenue. These all require state approval and so that’s the other challenge that we are to address and face there.”

Just ahead of budget season, the Newport City Council tried to push a handful of bills through the General Assembly to help the city boost revenues through the booming tourism industry. One of these was a bill that would allow Newport to raise cruise ship fees from $3 to $10 per passenger.

“We were past due to level up to what the market charges and more importantly, the revenues raised off those fees will provide us with the resources we need to go out and fix much of the waterfront infrastructure that we have,” Khamsyvoravong said.

That bill, House Bill 8027, passed the House unanimously, with 10 representatives abstaining from the vote. The Senate version of the bill also passed with a sweeping majority, although it received two “nay” votes from Republican Senators Jessica de la Cruz and Elaine Morgan.

Hotel, amusement taxes fail to pass

The other two bills did not fare as well in the State House. The city wanted to establish an additional 2.5% tax on hotel bed sales, which would have been set aside for public infrastructure and resiliency projects. During the city’s budget process, the administration revealed that the city has a backlog of around $500 million in infrastructure improvements and repair projects it needs to tackle within the next five years. While the city did get permission from the General Assembly to put a $98.5 million bond referendum on the ballot this November, the city was hoping to score an additional revenue source to try and bridge this funding gap.

“When we look at the different types of revenue options before us, we’re casting a wide net to see what works best for Newport as a community,” Khamsyvoravong said.

House bill 8133 and Senate bill 3033, the two pieces of legislation that would have established this hotel tax upon passage, were both held for further study in May and never taken up again.

The other bill that did not make it past committee was 9% amusement tax on ticket sales for any “amusement event” that sells over 100,000 tickets annually. Discussions on this bill highlighted the issue that only the Preservation Society of Newport County sells enough tickets per year to be impacted by this tax.

The Rhode Island Hospitality Association testified against both the hotel tax and the amusement tax bills at the House Finance Committee meeting in May.

“Those two bills were relatively new to bring forward, so this was really a place-setting year for us, to initially see what the general sentiment was on these bills at the state level as well as within our community,” Khamsyvoravong said. “We’re going to take that feedback and reconsider how they might be better tailored in the future to maintain that balance that we have here between great revenue-producing activities for the city generally speaking, but making sure that some portion of those revenues comes back to actually make the improvements we need to keep the city operating.”

This article originally appeared on Newport Daily News: Newport cruise ship fee increase passes; hotel, amusement taxes fail