Groton — State Rep. John Scott, R-40th District, has introduced a bill that would allow municipalities to charge their own hotel and restaurant tax.

Scott, who represents Groton and Ledyard, said cities and towns need alternative ways to raise money to relieve the burden on property taxpayers, and other states allow this taxing. A substantial tax on hotel rooms is almost expected, Scott said, adding that visitors would be paying the tax, rather than residents.

"If you go into your favorite travel planning website, you see the listing for (a) hotel and it might be $100 for the night. And then all of the sudden it's $150 because of all the different taxes," Scott said. "So it's not unusual. And I don't think it's going to discourage people from coming at all."

But Tony Sheridan, president of the Chamber of Commerce of Eastern Connecticut, disagreed. Tourism has been hurt dramatically the last few years and is just starting to improve, he said.

"The bottom line here is that we cannot afford another tax at this time," Sheridan said.

In the 1990s, Stonington made several unsuccessful attempts to get the legislature to implement a 1 percent local hotel tax to offset the cost of tourism and earn revenue from the hotels in Mystic. It was opposed by business groups and legislators in other parts of the state.

Scott's proposed legislation would authorize municipalities to levy a local sales tax on food and a local hotel occupancy tax, as long as the municipality reduced the amount of property taxes owed in proportion to the revenue collected.

Connecticut charges a state room occupancy tax - also called a hotel tax, hotel occupancy tax or lodging tax - of 15 percent, the highest in the country when compared to other state hotel tax rates, according to a 2014 study on lodging taxes. The study, by Chicago-based HVS Convention, Sports & Entertainment Consulting, looked at hotel taxes and revenue in the 50 states and in the 150 largest U.S. cities.

But the study also showed that more than 30 large cities charge higher lodging tax rates than Connecticut, because they combine state hotel taxes with municipal, local and special district taxes on hotels.

"States with high lodging tax rates typically have more restrictions on the imposition of local lodging taxes," the HVS study said. "To illustrate, Connecticut has the highest state lodging tax rate at 15 percent, but forbids all local authorities from enacting lodging taxes. On the other hand, Oregon imposes a low state lodging rate but does not restrict local rates."

Connecticut raised its state hotel tax, which applies to lodging stays of 30 days or less, from 12 percent to 15 percent in 2011.

Lodging taxes are considered politically palatablebecause most overnight visitors who pay the tax aren't constituents, the study said. But in reality, local hotels carry the weight of a tax along with their guests, the study said.

"The lodging market is competitive, and in a competitive market, the tax burden is shared between buyer and seller," the study said. A hotel manager may not be able to pass a tax increase on to customers, depending on demand and competition.

Many hotel visitors to Groton do not pay room occupancy tax because they are visiting on government business, said Edward Dombroskas, executive director of the Eastern Connecticut Regional Tourism District. Visitors on government business pay a different room rate, typically a bit below market, he said.

Guests may be in the Navy, performing contract work for the Naval Submarine Base, or working with the Coast Guard, he said.

"For the hotel it's a good revenue source, (although) the hotel isn't making the same rate that they would make from the general public," he said.

Hosting people on government business doesn't hurt if occupancy is low, but it can make a difference if rooms are close to full, Dombroskas said. In that case, a hotel has less space for private travelers who would pay a higher rate, he said.

Hotel rooms for business travel are also price-sensitive, which means the price affects the demand, or whether a hotel room will sell.

Businesses are careful enough that a 1 percent to 2 percent additional tax would have impact, Dombroskas said.

"And when they're doing an analysis of where to put that convention or they're looking at group tours, they're looking at the lowest possible rate to pass on to customers," he said. "It can make the difference as to whether a room is selected in one area or another."

The local delegation could help by using a different approach instead, Sheridan said.

"I'd much prefer to see legislation requiring the existing tax that's collected be divvied up statewide, proportionally to where it's raised," Sheridan said.

Part of the hotel tax used to be split this way, Dombroskas said. The state would return about 25 percent of the lodging tax collected back to the tourism district where it came from, he said.

"So, effectively, if you were successful marketing the region, you would have a larger budget to market," he said. Under this arrangement, the local tourism district at one point covered just New London County and had a marketing budget of $1.5 million, Dombroskas said.

Now the Eastern Regional Tourism District is funded at $500,000 as a line item in the state budget. It covers New London County and most of Windham and Tolland counties.

"Even if we do a fantastically successful job in promoting the region, we're still operating on the same flat-rate budget," Dombroskas said. "It doesn't have the marketing incentive that it did have in the past."

d.straszheim@theday.com

Twitter: @DStraszheim