Only three businesses initially affected; council sees new levy as way to shift burden to visitors and hold off hikes to real estate, personal property
By Randy Arrington
LURAY, April 14 — Despite a proposed 1-percent reduction in spending for the upcoming fiscal year, the Luray Council voted, 5-1, on Monday night to impose a new 1.5-percent admissions tax that will initially impact only three businesses. Council members defended the decision by noting that mostly visitors to the Town would be paying the additional fee, which in turn will delay potential increases to tax rates on the real estate or personal property of residents.
The admissions tax begins July 1, after the Town increased both the meals and lodging levies last year.
“Over the last 10 years, our operating cost as a Town has increased $3 million…and I’m not talking about big projects. I’m just talking about salaries, insurance, vehicles, supplies, equipment…,” Councilman Jason Petit said prior to Monday’s vote. “We’re bringing in more money off food [through the meals tax] than TOT [Transient Occupancy Tax or lodging]…it takes some burden off residents, and we’re looking at tourism, so it’s not on the residents.”
Town staff has conservatively estimated the new admissions tax will generate between $220,000 to $250,000 annually. The same revenue stream would require a 5-cent increase on the real estate tax rate — equating to an average additional cost of $144 annually for each home owner in Town, according to an example offered by Mayor Stephanie Lillard during the council’s lengthy discussion on the issue.
“We are going to put the money back into tourism,” newly elected Councilman Chuck Butler said.
Two of the three speakers that addressed the council during Monday night’s public hearing on the proposed tax, were leaders of the Luray Caverns Corporation — John and Rod Graves. John spoke first and noted that he and his brother had been approached by Town staff a few months ago and they “agreed on a rate”, knowing the Caverns would carry the lion’s share of the levy’s impact.
“It’s my hope that you use the [additional funds] to improve the Town and give our visitors something else to do…many of our visitors come in the caverns and then just drive away,” John Graves told the Council. “More can be done to get them to stay…and we’d like to see these funds used for bettering the Town for future tourism and future living.”
“Speaking from the heart, this didn’t hit me well,” Rod said at the onset of his turn at the podium, “but it’s a reality…just like death…death and taxes, right?”
While Rod acknowledged the “merits and disadvantages” of the new levy, his main concern seemed to revolve around the potential for future hikes.
“It’s being implemented in a way where it’s not as noticeable at first, but the devil is in the details,” he continued. “We meet a year ahead of time to talk about what people will pay…if this [tax] becomes too aggressive on the percentage, it could be a problem. The visitors only see the price at the bottom.”
Rod noted the national landmark’s 220 employees, its 520,000 visitors annually, and the long history that his family has had with the Town — including donation of park land, expansion of the attractions around the caverns, construction and operation of the airport for decades, and numerous donations to non-profits, schools and charitable organizations.
“Every place has taxes, and we understand that,” Rod told the council, “but whatever the Town may gain from it, you may lose something if it would be too high…and that’s the problem. Big problem.”
The Page Theater (movies) and the seasonal shows at Darkwood Manor (theatrical haunted house) are the only two other businesses that council members mentioned that would be effected at this time. The 1.5-percent tax would add 12 cents to a movie ticket and about a quarter to enter Darkwood. About 51 cents would be added to a ticket to Luray Caverns.
“I just don’t want to slap everything on one or two business,” Councilman Ron Vickers stated a few minutes before casting the lone dissenting vote against the new levy. Vickers also stated the percentage was “too high.” Councilman Butler supported the measure “with a great deal of reluctance.”
The entire council seemed to agree that any future hikes to the current rate of 1.5 percent should carefully consider the impact on local attractions.
“I do think the Council has to be responsible in the future,” Councilman Alex White said. “If a council came in and decided to double or triple something like this…it would be downstream of a political failure of the Town, and it’s up to us to elect responsible people because I think that would be really irresponsible.”
The only other speaker at Monday’s public hearing, Lou Padroski — a board member representing Performing Arts of Luray (PAL) — was assured by Council members and Town staff that the non-profit organization was exempt under both state code and the new ordinance creating the admissions tax in Luray. The Page Valley Fair will be exempt, according to Town staff; however, if Cooter’s in the Valley decides to hold another event at the fairgrounds (or any other for-profit event), then the admissions tax would apply within the Town’s corporate limits.
According to a Town staff report, “the additional revenue could be used to support items such as recreational activities and projects, tourism support programs, and public area maintenance such as our Greenway, pocket parks and Ruffner Plaza. The use of such a revenue stream would allow the Town to cover costs for the listed programs, and take on important new projects, while keeping other tax rates stable.”
The biggest message of the night seemed to be that the Town wants to maintain a positive and mutually beneficial relationship with Luray Caverns, who will, by far, see the biggest impact from this new tax.
“On a big holiday weekend, how many visitors would you say goes through?” Councilman Pettit asked the Graves brothers during the discussion. “About 5,000…well how many times does the toilet flush on those days? You need those toilets to flush, you need clean water for your restaurant…these are things we are obligated to provide… We gotta be partners. We’re partners with every business in Town in terms of the services we provide.”
Pettit advised the weighing of “dreams” versus raising taxes to support those dreams. Circling back to his earlier statement about Town costs increasing $3 million in the last decade, the councilman noted that the additional events, extension of the Greenway, pickle ball courts, improvements at Lake Arrowhead, operating the beach, maintenance of the Greenway and several parks, and other recreational activities come with additional and rising expenses.
“We can’t be everything to everybody, ” he said. “We need to maintain what we have.”
The new tax rate will be included in budget discussions annually and set each year, just like real estate, personal property, meals, TOT and others. Town Manager Bryan Chrisman said he would keep the dialogue open with the Caverns and other local businesses impacted by the admissions tax. And while the funds will flow into the Town’s General Fund, an emphasis on improving the Town’s tourism-related projects and events should continnue.
“This is driven by funds that are necessary to advance tourism-based projects or maintenance within the Recreation Department,” Chrisman said. “It’s not only important to us as government, but it’s also important to our business partners where tourism is their livelihood.
“It’s important to us to maintain the relationship [with Luray Caverns] that so many generations have built.”
For more information on the Town of Luray,
visit https://www.townofluray.com/
•••
RELATED ARTICLES
Luray considering 1.5% admissions tax to pay for increased demand on services
Lake Arrowhead beach closing for 2025 season
Council adopts lodging house resolution
Councilman Pettit asks about water usage by guests of the caverns. Unless I’m mistaken, they pay water and sewer bills just like everyone else. So, this argument is nonsense. It is, in my view, horribly shortsighted to increase the financial burden of the town on guests. As Rod Graves notes, what will you do when the tourists stop coming because of the cost?
The town already raised the tax on restaurants and doubled the tax on short term rentals last year. I’m still confused where all this money is going.
THREE MILLION DOLLARS a year extra in operating costs? and the town still has to shut down Lake Arrowhead? Where this money going?
I am glad to see the increase passed onto the tourists for once. While we may generate the majority of our revenue from tourism, the steady stream of tourists that flock here from about April through October take a toll on the locals. Our country roads and infrastructure were not designed for the volume of traffic we see. Trying to go down Main Street during those months is literally painful. Don’t even get me started on what it does to 340. I feel as though the quality of life for our residents has been constantly scarified to cater to the tourists. And what is the benefit to us? I don’t see an increase of 1.5% negatively impacting tourism. The majority of our tourists are from larger cities and are accustomed to much higher prices. Why do you think most of them end up moving here? Because of the lower cost of living. Fifty one cents per ticket is merely pocket change and not going to be missed by those here on vacation. This is long overdue and should be highly effective if managed properly.
Rod Graves was fretting about future increases of the tax driving visitors away. Well, I’ve lived in Page County since 1954, and the entrance fee wasn’t always $34. The Cave has increased the fee on their own many times and it hasn’t stopped tourists from buying in. This tax is individually just peanuts. If the Cave goes into protest mode and does something like have signs that inform, “We’re sorry, but you are paying an additional 1.5% entrance fee that benefits someone else.” Then that may hurt.