NEW BERLIN — Beloved traditions such as the Christmas parade and the exuberant Fourth of July celebration are in line for big financial hits, leaving organizers uncertain about the future.
Newer civic activities such as the Prospect Lions Snowshoe Roar race and the National Dash footrace of the New Berlin Junior Woman's Club, also will feel the pain from a change in state law.
The change, that rode through the Wisconsin Legislature aboard the last state budget bill, will take money for the events and give it to a tourism entity of the city's choosing that will use it to promote hotel stays anywhere in the state, said New Berlin Mayor Dave Ament.
The money for the local events comes from the city's 8 percent room tax collected from New Berlin's two hotels, Holiday Inn Express and LaQuinta Inn & Suites Milwaukee Southwest New Berlin. Since the 1960s, the state has allowed municipalities to keep 88 percent of the room taxes and to use the rest to attract overnight tourism.
Less for groups, city
The new legislation reduces how much cities can keep and requires the rest be sent to a tourism entity.
Until now, New Berlin usually gives the tourism share of the room tax to groups that plan events bringing people into the city, such as parades and the Snowshoe Roar.
Starting this year, none of the room taxes collected will go to those groups, city officials said.
"We can't do that. There will be no more grants from this fund," Ament said.
"It will be a big hit to all the organizations," said Ralph Chipman, treasurer.
The Fourth of July Commission got $10,000 this year to add to money from sponsors the commission finds to pay for the multi-day celebration.
The festivities did all right financially this year, but the future is murky, said co-organizer Cheryl Schober.
The celebration might have to be cut back, the organizers might have to put out a strong community-wide appeal for funding or the city might be able to chip in some tax money, Ament said. The problem with city funding is that New Berlin will already lose $46,400 a year in room taxes from the change in the room tax law.
Despite the city's dire warnings, Schober said she holds out hope that the tourism entity will see the value in local events and make contributions towards them.
"We're waiting to find out what the new tourism group comes up with," Schober said. "We're in limbo."
However, she doesn't hold out hope for the $1,500 the New Berlin Prospect Hill Restoration Foundation receives for its Historic Day, held in September. She's president of the foundation that uses its grant to advertise Historic Day on the radio.
Schober said she hopes losing the money will not be too bad.
"We didn't have a grant for many years," she said.
While the groups will not get any new room tax money, there is some left that hasn't been awarded, yet. The city's small grants commission will award that next January for February, Chipman said. There is roughly $36,000 in old room tax money, which is less than the $40,000 to $50,000 the commission normally recommends for awarding each year.
The city set up a tourism commission to replace the small grants commission. The tourism commission sent out a request for proposals to tourism entities to handle New Berlin's room tax money.
City taking hit
There is a four-year phase-in period for the reduction of the city's share of the room tax to soften the impact on property tax payers. New Berlin uses its share, that stood at $280,500 this year, for debt payments, building maintenance and for community development, Ament said.
If the new law were in full effect this year, the city would have $46,400 less for those purposes. That money must be made up somehow, or maintenance could suffer, Ament said.
It isn't just seeing money raised inside New Berlin going off elsewhere that bothers Ament. It's that the room tax was originated to make communities more welcoming to hotels, he said.
What city wants hotels with their potential of fires, thefts, drugs and prostitution, when they can have a nice quiet office building, he asked. The room tax law wasn't created to promote tourism, it was created to increase hotel space, he said.
In what was probably the last time the New Berlin Common Council gives full tourism grants to local groups, it last month approved:
- $10,000 for the Fourth of July Commission.
- $9,000 for the Prospect Lions Charities for the Snowshoe Roar, Plein Air art competition and Reindeer Romp
- $6,500 for Prospect Lions Charities of New Berlin for the Christmas parade
- $9,000 for the New Berlin Junior Woman's Club for the National Dash
- $4,000 for the Nordic Council of Wisconsin's annual Scandinavian festival
- $1,500 for the Prospect Hill Restoration Foundation for Historic Day