Marquette City Commission to explore option allowing tourists to support local infrastructure

MARQUETTE -- At Monday night's meeting of the Marquette City Commission, Commissioner Michael Larson brought up a recent statement made by Traverse City Manager Ben Marentette about the potential of an additional tax placed on hotel rooms and short-term rentals which would be collected by the city to use for infrastructure.

"Recently the Traverse City Manager has been encouraging destination communities across Michigan to explore a local option that would allow overnight visitors staying in hotels to support public infrastructure and services that they rely on during their stay," said Larson.

"Rather than waiting to react on ideas that happen elsewhere, I'd really like to see Marquette join in helping shape those conversations, potentially from the beginning here.

"I want to make it clear that tourism is one of Marquette's greatest strengths, and we should continue to welcome visitors to our community. But as a destination community here in the U.P., we also know that visitors rely on our roads, our parks, our waterfront, public safety and other city services.

"And maintaining those services certainly comes with real costs that are borne currently solely by city residents."

Marquette County sees over one million tourists each year. The city of Marquette saw over 30,000 visitors over the Fourth of July festivities alone.

"Our population fluctuates with tourism," said Marquette City Manager Karen Kovacs. "That means we are required to build out our infrastructure and our response to include those fluctuations even though later on in the year our population might not be that large."

These visitors put a strain on local budgets by using services, such as roads, wastewater treatment plants, public safety and parks, that they do not buy into themselves. As it stands, local taxpayers are footing that bill.

"I'd like to see Marquette engage with some of these communities and maybe the (Michigan Municipal League) to explore what a local option might look like and how we can shape at least that discussion," said Larson.

The other commissioners expressed support for the idea. The call for a "bed tax" is not new in Marquette, but there are several roadblocks in the way.

Namely, a state law from 1974 called the Accommodations Tax Act prohibits "counties and local units of government to impose and collect an excise tax on persons engaged in the business of providing rooms for dwelling, lodging or sleeping purposes to transient guests" unless that county has a population under 600,000 but has a city of over 40,000 residents. Furthermore, the tax revenue could only be used to acquire or maintain "entertainment facilities" or to attract more tourism.

Grand Rapids was granted an allowance for an 8% lodging excise tax in 2024, which they used to finance Amway Stadium and Acrisure Amphitheatre.

Visitors to Marquette do already pay a tourism accommodation assessment of 6%, but that money is funneled into Travel Marquette and the Upper Peninsula Travel and Recreation Association, and is used to further promote and advertise the region to more potential visitors. The city of Marquette and Marquette County don't have access to those funds.

"I’d love to see a way we could shift some of the burden off of the residents that are living in the area and onto the people who are using our infrastructure - our roads, our sewer, all of our parks and open spaces," said commissioner Jessica Hanley. "I would love to see a shift. I know personally, I go to many cities that have hotel taxes when you go to stay in them, and I've never once questioned staying at that hotel because of that tax.

"So I find it really hard to believe that it would limit anyone from wanting to come to our beautiful city and I think it would help release the taxpayers in the area from some of the burden that we cannot handle currently."

"Obviously there is a cost burden that the city does have because of tourism," said Kovacs. "On the other hand, we all understand that (tourism) is really important to ... our local economy, and so that is why we are talking and currently in the process of creating a sustainable tourism management plan.

"…We’ve been talking about (a bed tax) since the beginning of my time here, and some of our legislators have been unable to find a path forward for that. Some have not been willing to take that on.

"I think that this is going to be one where we are able to partner with other communities and look at a way forward for all of our communities. Grand Rapids recently received a change that they were allowed to have some hotel assessment or bed tax assessment and were able to fund their arena, so looking at specific purposes for (the tax revenue) might be the way forward, but really looking to address that cost burden we receive."

Kovacs said that the city could have a resolution drafted and ready for commissioners as early as their next scheduled meeting which would give the city, in her words, "that authority to start pedal to the metal kind of action." That meeting is at 6 p.m. on Aug. 10 at Marquette City Hall.

Annie Lippert can be reached at 906-228-2500, ext. 550. Her email address is alippert@miningjournal.net.