Article on Dewey businesses raises questions

February 21, 2014

As a former member of the Dewey Budget & Finance Committee, I think it is important to add a bit of additional context to Nick Roth’s recent article on this Dewey businesses paying their share. First, the title of the article might lead a person to believe that this is a purely gratuitous offer by the Dewey Business Partnership and gesture of their largess. That’s not the reality of the situation.

In fact, back in July the Dewey Town Council challenged the business community to come up with a way of contributing to the town as a fair share initiative when the council agreed not to move the gross receipts tax to referendum (which would only have gauged public support for it). The GRT was the result of a nine-month effort of the 2012-13 budget and finance committee to develop a range of options for how to implement fair share, and took countless hours of work and several public meetings before moving the recommendation forward to council.

The threat of lawsuits by the big bars caused the town to vote down moving the GRT to referendum and say okay to having the Dewey Business Partnership come up with a suitable alternative to the GRT. I think the key word in that phrase is "suitable" and in most people’s minds that would mean comparable. You see, the GRT was expected to raise approximately $160,000 for the town annually, and would be a perpetual source of funding for the town operations by a large consumer of the town’s services - namely the bars.

The other confusing fact is the town manager’s statement quoted at the end of the article that states that the offer (which is still not posted on the town website nor on the DBP website), “is not meant to be a fair share proposal. This is meant to be a contribution from the businesses.” Yet, property owner Gary Keith asked the direct question whether this was supposed to be the answer to the DBP’s challenge to provide a fair share solution to the town, and Steve Montgomery, speaking on behalf of the DBP said "yes."

So now the council’s kind of stuck, aren’t they? The offer is to give $50,000 per year for five years - and also guarantee no additional taxes will be imposed, when they let $160,000 slip by for fear of being sued. What will the council do?

What they should do is ask the DBP to triple the amount, and remove the five-year limit, making a perpetual source of income to the town. And in turn, lower the accommodations tax to 1 percent from the current 3 percent, to make things more equitable for the property owners. My best advice is not to hold your breath in the hopes of that happening.

Dave Davis
Dewey Beach

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