Tax quickest way to ruin Dewey tourism industry

March 8, 2013

Tourism taxes have become the new trend today for elected officials to pay for their deficit woes and poor management of local budgets.


Dewey Beach council members along with Mayor Diane Hanson are looking to do just that. They are promoting an effort to raise an additional gross receipts tax on those businesses that bring in revenue to the thriving tourist town in order to cover an increase in government spending and their budget shortfalls.


Unfortunately, many politicians see “green” from additional revenues paid for by businesses and non-voting tourists while avoiding the backlash from Dewey homeowners who have willingly flocked to the seasonal hot spot over its quieter neighbors in Lewes or Bethany Beach. Dewey residents still enjoy the bounty of terrific restaurants and entertainment venues in town and perhaps started vacationing in Dewey as young professionals themselves.


The tax burden, however, will most likely have unintended consequences for local residents. According to the Maine Public Policy Institute, “while there is no economic consensus about which party taxes are shifted to, a general rule of thumb is to assume that one-third is shifted to owners, one-third to employees and one-third to customers.”


This shift will fall squarely on the backs of an industry that historically hires more Sussex County residents than any other business including healthcare and government. According to a recent University of Delaware study, the restaurant and hospitality industry is the largest economic engine of Delaware’s coastal economy, employing thousands of citizens. Restaurants specifically account for the largest component of Delaware’s tourism industry. It is the largest small business employer in Sussex County and in the state, accounting for more than $1.3 billion in annual revenues.


Many iconic Dewey venues have been around much longer than their complaining residential neighbors, providing decades of jobs, entertainment and food for visitors from all over the world. These dedicated businesses go above and beyond to give back to their communities, raise money and donate to festivals, charities and nonprofits.


They are often the first responders during disaster or tragedies. The sign at the Starboard has often been a great community bulletin board! The restaurant and hospitality industry in Dewey are great neighbors and the cornerstone of this community! Without them there would be no Dewey Beach.


Policymakers should think twice about any regressive tax that will cost the state important jobs and create a wedge between the town and the business community. The ripple effects will be felt in much of the local economy. And when these tourists decide to go elsewhere - taking their spending, parking fees, dog licenses and beach fire permits with them, they will surely leave Dewey Beach with yet another deficit and the council will be faced with more “beggar thy neighbor policies,” leaving them empty-handed in the end.


Carrie Leishman


Delaware Restaurant Association

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