The town of Watertown has its eye on the tax revenue of other municipalities so its own taxpayers do not have to finance the grand scheme to build what is now billed as a $12.6-million regional exposition center.
Based on the latest consultant's presentation, the project once envisioned as a convention center is not financially sound. It faces a gaping $1 million-a-year budget hole. According to Paradigm Economics, Buffalo, the annual operating costs for the 5,500-seat exposition center, which would be used for trade shows, concerts and other functions, could reach $550,000. It would be partially met with $300,000 in projected rental fees along with some parking fee revenue. That leaves a quarter-of-a-million-dollar operating deficit.
Add to the loss debt service which will require nearly $575,000 in interest payments alone the first year and the town's obligation approaches $1 million a year with no visible revenue stream to pay for it.
Deduct $150,000 town officials expect to raise through unspecified fundraising, and there is still a shortfall of $850,000. Where will it come from? Who will pay?
Town officials want to use Jefferson County as their tax collecting agency by hiking the bed tax another percentage point to 4 percent to the benefit of the town. Revenue from the county-levied tax on hotels and motels in the city and other towns will be funneled through the county treasurer's office into town coffers. Yet, Supervisor Joel R. Bartlett said his "intention is not to pay for this through property taxes."
Bed tax money is also split between the county and municipalities in which it is collected. Proposals to redirect any funds to the town of Watertown assumes other towns will be willing to surrender their share of the bed tax.
Based on the current division of bed taxes, the proposed tax increase would generate about an additional $200,000 a year for the city and towns. The city and other towns would have to agree to turn over their share of the money to the town of Watertown. The county would have to agree to turn over its share of $200,000 as well.
If the town did get to keep all $400,000, it still falls far short of what is needed to meet projected expenses.
The proposal also sets a precedent. Hiking the bed tax for the town project opens it to other municipalities. City residents have argued for years they need a second ice sheet at the fairgrounds arena. Following the town's logic, the city should be entitled to bed tax funds to build the second ice sheet.
It appears that town officials have abandoned plans to build the dome-styled center on the unfinished Route 202 in the town. Instead it will be on 12 acres in the city of Watertown. So, town leaders want the city to forego property taxes on the center. The city is collecting about $8,500 a year on the land.
The exposition center has been a town of Watertown project from the beginning. It has been town directed and town controlled. It is not a Jefferson County project. It is not a city of Watertown project. There has been no groundswell of opinion in its support. If the town is intent on pursuing it, let the town of Watertown pay for it. The city of Watertown, Jefferson County and certainly the tax-losing towns ought to reject the idea.
