St. Germain board votes to raise room tax

The town of St. Germain will see an increase in its room tax as of Jan. 1, 2025.

Following months of public discussion and a public hearing, on Nov. 11 the town board voted to nearly double the town’s room-tax rate from 4.5 percent to 8 percent.

Room tax is a surcharge applied when out-of-towners rent lodging accommodations, such as hotel rooms, resort cabins, or private homes. In the case of St. Germain, 70 percent of collected room-tax revenues go to the chamber of commerce and the other 30 percent go to the town coffers.

By state statute, 30 percent is the maximum share a municipality is allowed to receive.

Also by state statute, municipalities the size of St. Germain — with a population of fewer than 360,000 people — are not permitted to charge a room-tax rate of more than 8 percent. St. Germain’s rate had been set at 4.5 percent sometime prior to 2018.

The St. Germain town board, like many other municipal and county government bodies around the state of Wisconsin, has been struggling recently to stretch every dollar in its budget due to the rising costs associated with insurance, tech support, road-paving projects, infrastructure and mechanical repairs and a myriad of other expenses. 

Discussions about a potential rate hike began in January, and during a town board meeting on Sept. 26, supervisors voted to adopt an increase, pending a public hearing on the subject. 

The board was in consensus to plan for a new rate of the maximum 8 percent.

The public hearing held on Oct. 26 yielded a wide range of feedback.

“There were some against; some for; and some that didn’t mind; and some that thought it (8 percent) was too much of a jump,” town supervisor Kalisa Mortag summarized during the town board meeting. “It was kind of all over the place.”

“It would seem to me like there were more people that were in favor of a smaller-step increase — like to 5.5 or 6 percent — versus jumping up to 8 percent,” said town supervisor Jim Swenson. “And I’d hate to lose people to the other communities. It seems like in the winter months, everyone wants to be in St. Germain to ride the trails. They disburse out from here, then come back because we have more of the resorts open year-round. In the summertime, everyone is busy. It’s a big jump to go up to 8 percent.”

He said he was “sort of reluctant” to go with the increase of a full 8 percent.

Azael Meza, the chamber’s executive director, informed the board several other towns and cities are considering room-tax hikes, as well. 

“I believe Land O' Lakes has approved (a rate of 8 percent) last year and I think Sayner (town of Plum Lake) is on-track, if they haven’t already approved it, as well,” he said.

Plum Lake town chair Jackey Poustuchow told The Lakeland Times  the town’s room tax rate was increased to 8 percent “in the last year.”

“I know from the Vilas County Chamber meeting that we had the other day, other municipalities and towns are considering it,” Meza said. “They’re not necessarily all going to go to 8 percent, but they’re definitely trying to at least be on the Wisconsin average, which is higher than what we have right now.”

“We’ve got possibly two (neighboring municipalities) going to 8 percent right away,” said town supervisor Brian Cooper. “Going into 2026, there might be five or six towns that are at 8 percent, where they just up and did it over the course of 2025. And if we don’t go to the 8 percent, I just feel as though we’re going to be behind the eight-ball if we only go to 5.5 or 6 percent, come 2026.”

During its previous discussions on the subject of a room-tax increase, the board reached a consensus that any increase should not take place for one year (or more) from the time a new rate is adopted.

As accommodations providers often make bookings up to one year in advance, a room-tax increase might force some providers to renege on bottom-line prices they have already contracted with renters. 

Mortag cited a source saying Land O’ Lakes did not give lodging providers a full year to avoid raising agreed-upon prices with lodgers who have already booked rooms.

“It’s interesting,” she said, “Because their director — in an interview — was talking about all of their points ... and he had said he had placed 62 calls to rental facilities in areas of the state that were at 8 percent, to inquire about whether or not they felt that negatively affected their business, with that kind of change. He said not one of them said it affected them in a negative way.”

“One thing that I heard through the public hearing is that this is a big chore to do for the accommodations folks,” said town chairman Tom Christensen.

“They’re worried and concerned about it. Once it’s over, I think there will be a sigh of relief. So I think to do it at multiple times doesn’t make sense to me, based on the complaint that this is a big deal to do.”

If the decision was not to go with an increase to 8 percent, he said, the issues was “going to be talking about this for another two years or something like that.” 

“Because other towns in Vilas County went to 8 percent, and now we’re low, so to me, that’s a reason to go to 8 percent now and get it over with,” Christensen said. “The other thing I heard at the public hearing — and I don’t know if they meant it to be this way — but what I heard from some of the accommodations folks was ‘Don’t you raise the tax, so I can raise my rental. Maybe I interpreted that wrong, but that’s kind of what I heard: ‘If you don’t raise your tax, then I can raise my rental’. I guess if I were renting houses and cabins and things, I’d rather raise my rates than the tax. I can understand that thought process, but I don’t think that’s a valid reason not to raise room tax.”

Any time a price goes up, Christensen continued, “You always think ‘Oh, Lord, nobody’s going to come; nobody’s going to buy my product; nobody’s going to, nobody’s going to…’ but that just kind of doesn’t come true.”

“I suppose there’s a point in time where you can get it up too high, but we’re looking at less than $100 — maybe 90 bucks or so — on a $3,000 rental,” he said. 

“St. Germain in general is in a pivotal location,” said town supervisor Patric Niggemeier. 

“We’re sandwiched halfway in-between the two busiest towns, one of which just happens to be the snowmobile capital of the world,” Niggemeier added. “They (tourists) are going to be coming. Regardless. Guaranteed.”

He said he’s been “trying to contemplate” for the week before the meeting “any serious reason not to (support an increase).” 

“I can’t think of a single, actual issue that would be wrong with raising this,” Niggemeier said. “It’s the initial shock of it but after that, I think it’s going to be smooth sailing ... I think the town in general will prosper off of this increase.”

Meza reminded those in attendance that the chamber uses a portion of its 70 percent share to fund grants to various not-for-profit organizations, totaling $48,000 this year.

Recipients included the Bo-Boen Snowmobile Club, the St. Germain ATV Club, the town’s non-motorized trails committee and the Save the Chief committee, which raised funds to restore an historic statue of Chief St. Germain, a tribute to the town’s Ojibwe Indian heritage. 

“An increase — or a decrease — would definitely change what we could vie out to those non-profits,” Meza said. “Some of that does get redistributed to maintain the trails that everyone uses, or the toilet facility at Fern Ridge or landmark restoration like the Chief.”

During calendar year 2023, the town took in $159,131 from room-tax revenue, and the chamber took in $371,306. Based on those receipts, an identical year with a room-tax rate of 8 percent would mean $282,900 for the town and $660,100 for the chamber.

“What about the taxpayers in this town that are going to have to pay the difference to be able to afford the services and the increases in all the stuff we have to support the tourism industry?” asked fire chief Tim Gebhardt. “This taxes the people that are coming to this town to use our facilities and services; it’s not coming from the taxpayers of this town,” he said. “As a taxpayer, I think it’s more that they share in the joy of having to pay for the services. So I don’t think raising it to 8 percent is the worst thing in the world.”

“And I think that’s why it’s come to light here with the town board and that’s why we’re having the discussion,” Christensen said. “I think all of us here on the town board think the same way that, whatever it is, if it’s a road, a parking lot, playground equipment ... folks who come to stay here enjoy and use all of those kinds of things. And the repair and replacement of all of that equipment falls on the property-tax payer here. Granted, some of them are renting their places, so it is kind of worked in, but there are a whole bunch of residents that don’t have anything to do with it. So I agree.”

He then brought up the town’s lakes. 

“There are lake issues out there that funding is needed for those, too,” Christensen said. “I think the chamber will likely see lake districts coming and asking for (grant) money in the future. Because that all falls on just the residents of the lake districts.”

Ultimately, the board voted 3-2 to adopt the new rate of 8 percent, effective Jan. 1, 2026.

Christensen, Cooper and Niggemeier voted in favor; Swenson and Mortag cast the “nay” votes.