PHELPS — The Phelps Town Board indefinitely tabled enforcement of a Room Tax after discussion at last week’s town board meeting.

The town has previously brought forth the idea to enact this tax four times and it has been voted down each time — most recently in 2017.

Resort owners voiced their concerns during the meeting, which drew approximately 40 attendees, according to town Chairman Steve Doyen.

Doyen stated in a follow-up phone call that “there is nothing moving forward at this point — it has been tabled indefinitely.” He added until the board could get better information and bring the facts to the community, it doesn’t pay to bring the idea forward again.

Prior to the Sept. 14 meeting, newly appointed board supervisor Jeremy Ryan sent out an email to Phelps residents that voiced his support for the tax.

“As a town supervisor, I would be remiss if I continued to expect the property owners to continue to carry the complete financial burden of the town’s operations without asking others who travel to our beautiful town and utilize our roads, boat landings, parks, bike trails, snowmobile trails, ATV/UTV trails, library, lakes and every other amenity without contributing something towards that,” Ryan stated in his email.

“Room tax will allow us to do that. Although room tax comes with strict guidelines, it would allow us to use that money to help bolster the budget for the chamber of commerce, market our area more effectively, and it would allow the town to take less property tax dollars we currently allocate to the chamber and apply those dollars to the essential services.”

This email sparked rebuke from resort owners including Pete Moline, owner of Afterglow Resort; and Jeff Gear, co-owner of Phelps Lakeview Lodge, Phelps Hillside Resort, Holiday House and St. Germain Pool House, along with business partners Tyler and Amber Russell.

Moline voiced his concern in a call to the News-Review saying that resort owners in the town were so livid last time they tried to push this tax through, they cannot believe they’re trying to pass it again.

One of Moline’s main concerns is adding another cost to business owners that are already struggling to pay higher costs due to inflation. Another is the lack of staff.

“Costs are skyrocketing out of control — they say inflation is 10% higher but many of the needs resort owners have to pay for have gone up sometimes by 30%. Costs are ramping up right and left,” he said.

“We have to provide our guests with a certain level of services which is very hard to do without employees. We are running our tails off,” he said. “Now we have to try to find the time to attend these meetings on top of running our business.”

Gear, in response to Ryan’s email, voiced concerns about resorts being forced to pay for the chamber, which he argued does not assist in bringing in revenue to the town’s resorts.

“In the email (from Ryan) it appears the primary driver behind room tax is to, and I quote, ‘bolster the budget of the chamber of commerce.’ It is proposed that the chamber of commerce will then ‘market the area more effectively and it would allow the town to take less property tax dollars currently allocated to the chamber and apply those to essential services’,” Gear said. “I own several multi-million dollar businesses and not once, including our investment in Phelps, has the chamber of commerce made the difference in our businesses being successful or not successful,” he said.

“If we had room tax to help fund the chamber, we could then take the $30,000 we contribute to them and utilize it for the general operations of the town, like buying fire trucks, plowing roads, mowing our parks, grading, etc.,” Ryan said in his email response to Gear, adding that the chamber does many ancillary things to drive heads to beds.

“For you to mention that you have never gotten a reservation from the chamber I think is not completely accurate. One example would be, I personally see boats from the muskie tournament parked in your parking lot. That is a chamber organized event. Maple Syrup Fest, Scarecrow Fest, Fourth of July events are other draws to the community. Not counting how they market our snowmobile trails, ATV/UTV trails, bike trails, wonderful lakes, and parks. So yes, they do help bolster the economy and drive tourists to the area,” he added.

Genevieve Coady who owns Coady’s Point of View with her husband, Darren, said after the meeting that she was frustrated with how the topic was brought up, and how quickly the town wanted to begin enforcing the tax.

“We and the other resorts in the area have bookings for next year committed by guests. So when Ryan said they would start on the first of next year, because contracts have already been signed with their guests, the resort would have to pay out of their pocket,” Coady said. “It would cost our resort $10,000 instead of the tourists paying it which is the intention. As Darren and I said multiple times at the meeting, we’re not in theory opposed to the tax but it needs to be done much more strategically.”

Coady added that many visitors come year after year and know what amount to expect.

“So now putting another raise on them after inflation costs from resort owners is a big ask, so we need to think about how we get to that. A week-long vacation for some of these families is a lot of money — it’s just not a weekend away and so adding another 5% or whatever it ends up being is just another big ask of them,” Coady said. “We need to think carefully if we are going to ask them and they feel that they are not getting the value, they might go somewhere else. We need to think about how to invest in those dollars and what the money goes for and how people make important decisions and how Phelps can and should follow in line with market trends.”

Doyen agreed that people on both sides of the argument have valid points. He said that while it’s possible the room tax could be addressed at a further point down the road, he doesn’t see that happening for a while. He also noted that Phelps and Lac du Flambeau are currently the only communities in the North Woods not utilizing a room tax.



Phelps Correspondent Sharon Gifford contributed to this story.