Lebanon County Commissioners may exit hotel tax grant program

This article was funded by LebTown donors as part of our Civic Impact Reporting Project.

Lebanon County Commissioners took a first step to end their participation in the $1.38 million hotel tax grant program during their Thursday, Sept. 3, meeting.

By a 2-1 vote, with Commissioner Jo Ellen Litz opposing, commissioners moved to consider adopting a new ordinance that would transfer the county’s portion (10%) of annual funding totaling about $138,000 to Lebanon Valley Expo Center (LVEC) and Visit Lebanon Valley (VLV). Those agencies would utilize or disburse the county’s funding.

Commissioners on Thursday approved a two-part process that would have county solicitor Matt Bugli advertise the pending new ordinance to “remove the old allocation and adopt a new one” as proposed by VLV and LVEC officials at the meeting. 

Of the 10% share currently provided to the county, the new allocation would see LVEC receive 70% and VLV get the remaining 30%, which based on 2026’s projected totals would provide $91,560 to LVEC and $39,240 to the tourism agency.

Additionally, under this revised structure, LVEDC director Pat Kerwin said expo officials will “manage all future financial requests related to expo center events, through rental/adjustments or other mechanisms at its discretion.”

VLV president Nancy Gates said her organization will “establish a grants committee to administer funding requests for community events and programs” held elsewhere to use its 30% allocation.”

The committee will consist of five members, she said, with one appointed by commissioners. The group will create a rubric to determine how grants are disbursed.

“We acknowledge that the Commissioners retain full authority to adjust allocations at any time,” Kerwin and Gates said in a joint statement. “However, we respectfully request that this revised allocation remain in place for a period of five years.”

Established by Act 142 of 2000, Lebanon County currently charges and collects a fee of 5% from hotels, Airbnbs, etc., that rent overnight rooms.

As previously reported, the county collects the tax and distributes it to VLV, the local tourist agency, minus a 4% administrative fee kept by the county treasurer’s office. VLV then distributes 35% of the remaining 96% of funds to the Lebanon Valley Exposition Corp. (LVEC) and 10% to the county, keeping the balance of the proceeds. 

VLV is required via County Ordinance 54 to use the funds for the purposes of “tourism, promotion and tourism development” while LVEC is charged to spend their funding for “tourism, convention promotion and tourism development.” The ordinance also states the county’s portion is designated for “maintaining special county tourism efforts.”

On Thursday, Kerwin noted the expo would allocate its portion of county funding for the center’s expansion, which recently broke ground. Construction is underway and is expected to be finished in time for the 2027 Lebanon Area Fair.

Bugli said after the meeting that he hasn’t done “a recent deep dive into the statute” concerning the use of the funding for a capital improvement project, but said the law is “very, very broad in what it (funding) can be used for when promoting tourism.”

“From my reading of the Hotel Act and how broad it is, it is permissible because it is tied into events held there throughout the year,” Bugli said.  

Commissioner Bob Phillips touted the expo center as a tourism destination leader in the Lebanon Valley.

“We really feel like the expo center is very much a center that can lead to additional economic growth in the area, and that additional expansion gives an opportunity for that to happen,” Phillips said. “So we want to do all that we can from a supportive standpoint to make sure that his crew have what they need to be successful and that we can all benefit from that success throughout the county.”

Commission chairman Mike Kuhn noted what Kerwin had said about fee reductions for expo center renters under this new plan. 

“Some of the grants that we have been awarding in previous years have been for events that are hosted at the expo center. And as I said with this additional funding to create a new building, it gives the expo center the opportunity to maybe work with some of those events on their rental fees,” Kuhn said.

He cited the annual Gourd Festival as an example. 

“We’ve been giving them a significant amount of money and it’s a good return. They bring people from all over the country. But again, they may not necessarily need a grant if they get the appropriate reduction in their rental fee for that year in lieu of a grant. So this is not necessarily just an exact switch of dollars,” Kuhn added.  

Prior to the vote, Litz said she was opposed to the reallocation because it removes county officials from the process.

“First of all, this board would no longer be privy in a timely manner of the grants that are being presented. And I find that troublesome because that keeps our finger on the pulse of what’s going on with tourism in our county,” she said. “Next, as it has been for the last, I don’t know, eight years or better, I have not had the pleasure of serving on either Visit Lebanon Valley board or for the expo board. So it would revert to majority commissioners only, and I would further feel isolated and secluded from what is going on.”

She also mentioned isolation for businesses that receive grant funding from the county.

“And finally, my point is that there are a lot of businesses in this community that I think would feel a similar isolation because we have places like In The Net in Palmyra, Campbelltown area, the Lebanon Valley Mall, the Hebron Fire Hall, Kimmerlings Grange, and I could go on, but you get the picture,” she added.

In December 2024, Jen Kuzo, Gates’ predecessor at VLV, presented to commissioners during a workshop a year-end report that included data from Placer.ai, which is a foot traffic software program used by tourism agencies. 

Kuzo said Klick Lewis Arena and In The Net Sports complex had a majority of people traveling over 30 miles to their venues, while the expo center’s draw was more localized, adding the center had 72% of its guests coming from within 30 miles.

Gates said she plans to work more closely with In the Net officials, noting their representatives had turned down a seat on the county’s tourism board.

Ordinance process

County administrator Jamie Wolgemuth explained the process for creating a new ordinance concerning the hotel tax program.

“The current allocation breakdown is built into the ordinance that was passed establishing the rate of tax. So if you’re changing it, and if you’re changing it in the future, it’s a bit cumbersome to have to redo the ordinance every single time,” Wolgemuth said. “So I think the better thing to do would be to adopt a new ordinance that sets the allocation by resolution.”

Wolgemuth continued his explanation, noting it would be a two-part process.

“First, would be for the solicitor to advertise the ordinance that would remove the allocation but refer to it as a resolution. And then once that’s done, adopt that resolution and adopt that ordinance and the resolution,” he said, adding that it would be considered at the next meeting on Sept. 17. “We would have to advertise and make sure that it is advertised in accordance with the law.”

If approved on Sept. 17, the county’s program role would end Dec. 31.

Program changes

The county’s hotel tax grant program has undergone changes in recent years, and has been a focal point of past commissioner meetings. 

In August 2024, commissioners changed the guidelines to emphasize its goal to “put heads in beds” since the highly popular program’s funding was running low. (At one meeting, there were funding requests totaling $17,000 but only $8,300 in the county’s hotel tax grant program coffers, which led commissioners to table all of those requests. Demand outpacing cash supply was an ongoing problem at other meetings, too, and led to the guidelines to reel in funding requests.)

Commissioners altered program guidelines in August 2024 to ensure recipients requesting funds are using those dollars to promote events that attract tourists to stay overnight in Lebanon County, meaning tax grant funding would go to organizations showing their events were leading to overnight stays. 

However, since these were only guidelines, that still allowed commissioners to award grants as they saw fit. On Thursday, Kuhn noted annual funding provided to one local organization didn’t exactly “put heads in beds.”

“We’re going to try to help everybody we can. We’ve traditionally supported the CLA for flowers downtown. It’s not going to put one single head in the bed, I would argue, some might argue differently, but it’s an important investment in beautification. So again, we’re going to try, if it’s a worthy organization and we have the funds to do it, we’re going to try to find that (funding) to help them,” Kuhn said.

“The other thing that we’re hopeful of as well is that the expo center and places like In The Net can generate additional overnight accommodations now that we have an additional facility (hotel) that is available,” Gates said. “And so as that happens, then the additional pot of money becomes greater as well for all of us to utilize. … So that’s really our goal, but we will probably have to prioritize certain things and we will have to create a rubric that looks at that. But we do recognize that it’s important to have a vibrant community here that people want to come to.”

Interviewed by LebTown during the August 2024 revisions and at other meetings about the county’s ongoing involvement in the program, Phillips stated his desire for the county to get out of the hotel tax grant business.

Phillips reiterated his position Thursday, adding that discussions for how to reallocate the county’s 10% had been ongoing for the past year. LebTown asked Wolgemuth after the meeting and he affirmed that the county would still continue to receive a 4% administration fee since the funding distribution process would remain unchanged.

Public comment

Pam Tricamo of Lebanon said she believes the county should not be in the hotel tax grant business. She said she supports funding local groups like Friends of Union Canal Tunnel Park that support tourism even if those visits don’t necessarily lead to overnight stays, and she noted that funds provided by VLV to the historic site have helped lead to marketing that brings tourists by the busloads.

LebTown asked if the county’s share of the tax grant, if reallocated, would be audited and if accountability guidelines would be established.

“I think there’s a lot of things that we need to work out and once we get the committee in place, those are all the sorts of things that they’ll be discussing along with the rubric that you asked about earlier to kind of put that together,” Gates said. “We are a 501(c)(6) so ultimately, at the end of the day, our (IRS Form) 990 is public and is filed on a yearly basis so that information is publicly available on our organization at any time.”

Hotel tax grant award

In an unrelated matter, commissioners unanimously agreed to provide a $2,000 hotel tax grant funding request to Logan Brinson Elvis Festival for the Legend on Stage at the Eagles Banquet Hall, Lebanon. The program cost is $12,000, with proceeds being used to support children’s programs in Lebanon County.  

Other board actions

In other business, commissioners voted unanimously to:

• Accept the treasurer’s report, including a beginning cash balance of $1,851,453.32, receipts of $1,031,605.72, for a cash total of $2,883,059.04, less our expenditures of $1,262,009.12, less our tax claim of $53,152.27, which brought the cash balance to $1,567,897.65, and that includes Friday’s payroll. 
• Allow Probation Services to apply for Intermediate Punishment Funding for 2026-27 totaling $200,586.  
• Submit two PCoRP Loss Prevention Grant Program applications totalling just under $7,000. The first request is to spend $4,098.25 to purchase a first aid kit and a new Amerex 3.75 KP Cylinder for Lebanon County Area Agency on Aging. The second request is to purchase at a cost of $2,893.60 a prisoner transport sidestep assembly and rear step assembly for the Ford transit van unit 101 to replace old and rusty steps used by the Lebanon County Sheriff’s Department.
• Accept Lowell Brogan’s resignation from the Lebanon Transit Board of Directors, effective Aug. 25. 
• Appoint Kathryn Joseph and Paige Rivera-Fransier, both of Lebanon, to the Lebanon County Commission for Women.
• Allow the Lebanon County District Attorney’s Office to apply for a RASA/VOJO grant totaling $103,532. The grant, which covers 2027, is for salaries and benefits for five workers, supplies, travel, and training for the victim/witness advocates. The distribution of the county’s allocation is $75,909 to RASA and $27,623 to VOJO.
• Give approval to Lebanon County Courts to sign the final contract for a jury management software upgrade with Tyler Technologies, which was approved in June for $30,095. The agreement runs for five years.  
• Approve the Aug. 20 meeting minutes, including an announcement that commissioners met prior to the meeting to discuss personnel matters.
• Grant various personnel transactions.

Executive sessions

Commissioners announced that they had held an executive session prior to the meeting, and at the end of the meeting they were going back into another session. Both were held to discuss personnel matters, according to Kuhn. 

Next meeting

Lebanon County Commissioners meet the first and third Thursday of the month at 9:30 a.m. in Room 207 of the Lebanon County Municipal Building, 400 S. 8th St., Lebanon.