Hotel tax bill opens funding door for smaller sports venues in Dauphin County

Two lines in a fiscal note attached to a bill that allows York County and 56 other counties to raise their hotel room tax also opens the door for Dauphin County officials to allocate a portion of their county’s room tax to smaller sports facilities.

Gov. Tom Wolf signed the legislation — House Bill 794 — today. The bill allows York and the other counties to raise their hotel room tax to 5 percent, up from a limit of 3 percent.

Dauphin County, which already charges 5 percent, will see very little change other than the technical amendment allowing wider distribution of funding.

Under the current law, sports facilities in Dauphin County must have between 10,000 and 14,000 seats to receive a share of the county’s room tax. The Giant Center in Derry Township, which opened in 2002, is the only eligible entity.

But under the new law, the seating range will be 2,500 to 14,000 seats, a move that could benefit several proposed projects, including a new soccer stadium on City Island in Harrisburg and an aquatics center in Derry Township.

Statewide changes to county room tax rules don’t come up very often, so this is a proactive approach to help other county sports facilities in the future, state Reps. John Payne (R-Dauphin) and Keith Gillespie (R-York), the bill’s lead sponsor.

“Because we don’t run hotel tax bills every year, we wisely hopped in to do this now,” Payne said. “Odds are we will do something (with sports venues) in the next 10 years (in Dauphin County).”

However, the caveat is that debt service on Giant Center construction bonds, which don’t mature until 2030, will continue to be the priority for a major portion of the county’s room tax.

Through the Derry Township Industrial & Commercial Development Authority, owner of the Giant Center, the entertainment venue gets 70 percent of the first 2 percent of the county’s room tax to help cover the bonds.

Last year, that amounted to about $4.5 million for Giant Center. The county tax brought in a total of $10.9 million.

“The overall goal, whenever it can be done, is to give more flexibility or options for hotel taxes the way Giant Center has benefited,” said Chad Saylor, the county’s chief clerk. “We’re looking for other opportunities to replicate that on a smaller scale.”

The Dauphin County room tax, which was last increased by the county in 2008, has provided $48.4 million to the Giant Center bonds since 2000, Saylor said.

The home of the Hershey Bears hockey team cost $65 million to build, plus there was about $30 million tied to roads, parking lots and other infrastructure improvements, according to Hershey Entertainment & Resorts Co., which operates the facility.

There is about $46 million left on the Giant Center bonds, said Justin Engle, a Derry Township supervisor and chairman of the Derry Township Industrial & Commercial Development Authority.

“We don’t anticipate this legislation will have a negative impact on Giant Center,” he said. “The funds are committed to the ICDA through at least the maturity of the bonds.”