State Rep. Sara Cambensy, D-Marquette

MARQUETTE — Upper Peninsula state representatives Sara Cambensy and Greg Markkanen are working together across the aisle to encourage legislators to hold hearings on a bill which would allow U.P. counties to increase tax revenue on short-term rental properties.

House Bill 5521, sponsored by Cambensy, comes as a response to the rapid growth of tourism in the U.P. in recent years. The bill would allow for short-term rental properties to charge a 6% room assessment fee. Currently, only designated hotels are allowed to charge the fee.

U.P. counties have seen increased growth in tourism in the past 10 years, which has caused a strain on public safety as well as infrastructure, such as trails and housing.

While tourism is a major benefit for local businesses, counties with smaller populations and resources, such as Keweenaw County, have found their resources stretched thin.

“Tourism is a great economic driver for our small businesses and restaurants. My bill doesn’t take a penny away from the marketing and promotional things that our convention and visitors bureaus and Pure Michigan campaign help our U.P. communities do through their hotel assessment fee,” Cambensy said. “My bill simply looks to apply a similar tax on short-term rentals in order to help our local communities manage the number of visitors. When counties like Alger and Keweenaw see 1.2 million to 1.4 million visitors come through it to recreate, mostly during our summer months, you can imagine the strain that places on local officials to make sure they have the services and manpower necessary to keep people safe.”

Markkanen, R-Hancock, agrees with Cambensy.

“Tourism is the lifeblood for many communities in the western U.P. We have counties with only a few thousand residents that have to be able to accommodate hundreds of thousands of visitors every year,” Markkanen said. “We’re seeing an uptick in situations in the Keweenaw Peninsula where search and rescue is needed but lacks important resources and is severely underfunded. Our public safety departments need a boost in funding to be able to keep both residents and visitors safe.”

The current 6% room assessment fee brings in nearly $8 million annually to U.P. convention and visitor bureaus. The bureaus use the room assessment fees to pay for their operations and to promote tourism throughout the state.

The fees are not allowed to be used for governmental purposes, which restricts helping local communities manage tourism or pay for infrastructure.

“The last thing we want is for our visitors to call 911 for help, only to find there is no search team, no patrol officer, no DNR conservation officer and no ambulance coming to get them,” Cambensy said. “The same is true for our local taxpayers who live here year-round. Locals expect their taxes to cover their needs, and they don’t want to have their services jeopardized by visitors when they need them.”

The bill would allow the counties to let their residents decide if they would like to levy the 6% tax on the short-term rentals.

Cambensy and Markkanen hope to get the bill in front of legislators by next spring.

Randy Crouch can be reached at 906-228-2500, ext. 242. His email address is rcrouch@miningjournal.net.