Saturday, April 11, 2009

The second Med Mart tax?

Most of the Medical Mart and convention center project will be paid for with the quarter-cent sales tax hike passed in 2007. But not all of it.

The county will pay MMPI $45 million to $47.8 million a year from 2010 to 2027 to build and operate the project. The quarter-cent sales tax raises about $40 million a year ($42 million in 2008). Where will the extra $3 million to $7.8 million a year come from?

The leading candidate is the county’s tax on hotel room stays, known as the “bed tax” for short. I asked MMPI VP Mark Falanga about that yesterday.

“I think a portion of this [comes from] those funds, the pre-existing bed tax,” Falanga said. He said the county would know for sure. I’ll be making calls about it on Monday.

The bed tax raised roughly $14 million last year. About $4.5 million goes to pay off the bonds that were floated to build the Rock Hall, while $1.5 million goes to pay off the bonds that built Gateway. About $5.5 million* goes to fund Positively Cleveland, the city’s convention and visitors bureau. The bed tax makes up almost 90 percent of Positively Cleveland’s revenue.

Does the Medical Mart deal threaten Positively Cleveland’s funding? I will write about this again before the county commissioners vote on the deal on Thursday.

{*Correction: I originally wrote that Positively Cleveland gets $8 million a year, but about $2.5 million of that is paid out to other organizations and projects.}

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