Oconto’s room tax plan draws complaints

OCONTO – A municipal hotel room tax proposed as a way to generate revenue for tourism in the city of Oconto could do the opposite, according to the owner of the Econo Lodge.

Charging an 8% tax on hotel stays in Oconto, on top of the existing 5.5% in state and county room taxes, would likely cause a drop in repeat business, said Paras Patel, owner of the Econo Lodge in Oconto.
“It’s too much,” Patel said.

Patel and Econo Lodge employee Cheri Belongia spoke at the Nov. 22 Oconto City Council meeting about the city’s plans to impose a municipal room tax for the first time, saying it could encourage visitors to stay outside the city at hotels charging less in taxes.

Their comments stemmed from the Oconto City Council’s October approval of a new ordinance allowing it to form a Tourism Commission to use revenue generated from a municipal room tax to promote and develop tourism.

The city council hasn’t approved the room tax percentage yet, but 8% would be allowed under state regulations. The state of Wisconsin capped local room taxes at 8% in 1994, but it allows counties with 300,000 or more residents to exceed this limit.

At its regular October meeting, the Oconto City Council passed an ordinance allowing for an Oconto Tourism Commission. The commission is scheduled to replace the City Council’s Tourism Committee on Jan. 1, 2025, City Administrator Brittney Burruel said.

Control over an 8% sales tax on hotel stays prompted discussions about forming a Tourism Commission, according to Burruel. The mayor will appoint five commission members, subject to the city council’s confirmation, according to city ordinance No. 2024-07, which the council passed in October. Three of the five mayoral appointments may be council members, including the mayor, and two shall be citizen members, according to the ordinance. One member shall represent the hotel and motel industry.

The ordinance also states 70% of the total room tax collected shall be spent on tourism promotion and development or municipal development that’s expected to generate overnight stays at hotels and motels in Oconto. The city plans to construct a new tourism kiosk to provide information and suggestions to visitors. The Tourism Committee has discussed a variety of ways to promote Oconto as a destination, such as with more robust marketing and communications efforts.

Mayor Cliff Martin is interviewing interested candidates for the commission this month, according to Burruel.

“He wants to have all of his appointments in by December 17,” she said. Those interested in being considered should contact the mayor, she added. The ordinance states commission members will receive no enumeration for their time.

Patel said he understands the city wants more money for tourism, but suggested the new tax should start out lower, at 3%, to allow Oconto hotels to compete with those in other areas. “It’s not like a lot of people come here,” he said about Oconto.

While some Packer fans have stayed at the Oconto Econo Lodge when hotels near Lambeau Field were booked, Patel said he didn’t see the overflow business this year during Packer season.

Many visitors to the area prefer to stay where restaurants are open later and delivery is an option, according to Patel. Fishing is Oconto’s biggest draw, but imposing a municipal room tax might encourage visitors to stay in hotels outside of the city to avoid the extra expense, he said.

Belongia, an employee at the Econo Lodge, voiced her concerns about the room tax during public comments at the Nov. 19 meeting. Customers will complain about it, she said. “We’re going to have 40 people complaining and yelling, and I can promise you, they’re not going to come back,” Belongia added.

The Econo Lodge often hears visitors ask, “Where can we go after 9 o’clock to eat? Where can we go to see a movie?” she said. “They go to Green Bay or Marinette,” Belongia said, as Oconto doesn’t have much to offer after 9 p.m.

To compete with hotels in Green Bay and other local areas, Belongia said she has offered discounts off regular rates.

“When I first started at the hotel in 2016, I was lucky if I had two guests,” she said.

Belongia has offered price breaks, such as a funeral rate or a half price rate, to generate business. A combined tax of 13% will work against any offered discount, she said.

According to Belonia, offering a lower price often is the best way to compete because the company doesn’t offer as many dining options or events as Green Bay or Appleton do.

“People don’t come to Oconto for concerts because we don’t have them,” she said. “Why would we charge more than Milwaukee? I’m just confused as to why.”

Milwaukee has a 7% room tax, according to state documents. The Oconto City Council didn’t address these comments and observations at its Nov. 19 meeting.

The State of Wisconsin allows room taxes to be collected on stays at hotels, motels, lodges, inns, resorts, bed and breakfasts and other lodging accommodations for public use, according to the Wisconsin Department of Revenue.

Local tourism commissions are given the authority to determine how revenues dedicated to tourism are allocated. The City of Marinette collected $573,302 from an 8% room tax in 2023, according to state documents. It distributed $401,312 to the Marinette Room Tax Commission, which used it to promote tourism efforts and sports teams, such as $5,000 for Marinette Legion Baseball and an AAA State Baseball Tournament. The funds also are used to pay the salaries of marketing workers. Two part-time city marketing positions for $36,250 each were paid with room tax revenues in 2025, while two $50,000 payments to the City of Marinette’s Rec Center were made in March and June 2023.

That same year, the City of Appleton collected $2.2 million in room tax revenue and provided $1.3 million to the Fox Cities Room Tax Commission and $621,814 to the Fox Cities Convention & Visitors Bureau, according to state documents.

A Wisconsin Policy Forum report suggests 291 Wisconsin municipalities, or about 16% of the state’s municipalities, had levied room taxes generating a total of $111.9 million in 2017, the latest year for which data was readily available. This is an increase from 173 communities that collected $48.7 million in room tax revenues in 2000, according to the Wisconsin Policy Forum.

Its research indicates room-tax growth of 144% from 1999 to 2017 outpaced that of other kinds of taxes. Local taxes increased about 80% during the same period, while state taxes increased 50%, according to the report. Wisconsin’s personal income grew about 90% during the same period.

Historically, Wisconsin tourism has supported about 8% of private non-farm jobs in the state, the report said.

More municipalities have imposed room taxes as a way to generate revenue to promote tourism, the Wisconsin Policy Forum said in a May 2019 report, before the Covid-19 pandemic affected tourism.

“With state funding for tourism stagnant over the past two decades, the room tax also amounts to one of the few means available for increasing local spending to attract overnight visitors. At the same time, it has the effect of increasing the price paid by those visitors,” the Forum’s 2019 report reads.

The report said the room tax is applied to the cost of a hotel room, and not on food or other lodging amenities. The room tax is “generally limited to a maximum rate of 8% and is imposed in addition to any applicable state and county sales taxes,” according to the report.

At the Nov. 19 City Council meeting, the Oconto City Council also briefly discussed its plans for a tourism kiosk, which would provide information to visitors on things to do and places to eat and stay in the city. At the Nov. 12 Committee of the Whole meeting, plans to send an Oconto calendar to 3,000 residents were announced.