By: Diane Benjamin
I don’t know how many math classes a journalism major has to pass, but evidently it isn’t enough to see obvious problems with what they are told and then regurgitate. There is a perfect example in today’s Pantagraph.
The story is about Airbnb and the new 6% City tax that starts April 1st. The local hotels didn’t think it was fair they have to pay it, so both Bloomington and Normal happily passed an ordinance requiring Airbnb to collect it too.
Here’s where the reporter needs a math class:
Maria Nagle printed the 2018 numbers for McLean County – numbers that came directly from Airbnb. 3700 people stayed in McLean County Airbnb’s and paid a total of $275,000 to property owners. (275,000 / 3700 = $74.33 per night)
Later in the story City Manager Tim Gleason claims the new 6% tax could raise between $70,000 and $100,000 in Bloomington-Normal.
See a problem yet?
First, the numbers from Airbnb are McLean County not Bloomington-Normal. No locations outside of B-N are going to get taxed. The article doesn’t say how many are outside of Bloomington-Normal.
Second, and the BIG ONE – 6% of $275,000 is a measly $16,500. Hint for the math challenged: That’s nowhere near $70,000- $100,000.
How much would Airbnb stays have to increase to rack in even $70,000 in taxes? Easy calculation: $70,000 / .06 = $1,166,667. $100,000 in taxes would take $1,666,667 in rental fees. At around $74 per night Airbnb rentals have to increase from 3700 to 22,523.
The article states 2000 people stayed in an Airbnb in 2017, that almost doubled in 2018 to the reported 3700. Even doubling again the number won’t be close to numbers needed for Gleason’s estimates.
The story also says there are around 60 locations just in Bloomington-Normal. Every one of them would have to be booked year around to get anywhere near 22,523.
Maybe Gleason is predicting more Airbnbs popping up. It would take A LOT more and of course a reason for people to come here. It sure won’t be for the great roads. If more do pop up, say goodbye to at least one already struggling hotel.
In another story the Pantagraph announced a new news service is starting in Springfield, sort of like state associated press. Illinois Press Foundation claims they will provide unbiased news. There is no such thing, but I hope somebody on the staff can read through the numbers Springfield barfs up. The budget is never really balanced, hope their journalism degrees don’t get in the way of calling technical fouls on lawmakers using fuzzy math.
I am just wondering if there are any other small businesses or individuals making a little money on the side that the City of Bloomington can get a piece of? You know… a piece of the action….They don’t want anyone operating in their territory without them getting a piece of the action, right? Garage sales? Selling garden produce? Babysitting? Dog sitting? I wonder how much that neighbor kid is making on his mowing, snow shoveling and leaf raking? Yes if you are making a little money on the side…. Godfather Renner wants a piece of it. He is doing it for your own good and the good of the collective, so just sit down and shut up.
people will never learn..do not frig with a numbers person….
I’m sure any news/information will be top notched. Much transparency there. DCFS indicates a man for injuries to their child. He’s then found innocent. Day care is innocent. Poor persecuted parents-feel good story from the pantagraph. How did the child get the injuries. Wow! Sort off topic, but these two entities DCFS and BPD get our tax money and they are to protect the innocent. Ooops I said something negative about a ‘first responder’! Shame on me.
I came up with the same numbers you did Diane. If I did my job the way Maria does her I would be fired. Then again, I don’t work for the government or any politicians.
They needed to exaggerate the revenue gains because the amount was so minuscule. I agree with the others, though I tend to think this is less of a “cash grab” and more of a favor for the establishment members that own hotels like Snyder, the Marriott and Hyatt operators that put Normal taxpayers on the hook, and other members of the Chamber of Crony Commerce. I’m sure this “fair” tax will be followed by inspections, licenses, and other legalized harassment mechanisms. With ridiculously low occupancy rates, the local hotels are desperate. Maria Nagle and the Pantagraph have never questioned or challenged any information or ideas from the Renner or Koos administrations, why would she start now? Everything is great, just asking the moving companies.
Yes this is definitely a growth area for moving companies. We are in the calm before the storm with hotels. The shakeout is coming. When they start to go… they will fall like dominos and it will not be pretty. And yes there is a ripple effect that will move through our economy once it begins. Cleaning staff, maintenance staff, administrative/hospitality staff will all be out of jobs. 3rd party supply and service companies will be hurt and will most likely need to downsize and/or layoff workers. So let’s say we lose 5 hotels in the next 2 years (very possible)…. how many people/companies will be effected and what is the effect on the area’s GDP?
So instead of recognizing the problem (the oversupply of hotel space that has been created by a general economic decline in the area), we look for someone to blame and then tax them?
Lawrence: You have to understand the underlying attitude and “values” of Tari and his Marxist minions on the Counsel. They truly, passionately believe that ALL wealth belongs to the government. So a tax, ANY tax, simply removes money from individuals, whose possession of it is illegitimate anyway, and deposits it with “the State”, the rightful owner. That is why Democrats will never, ever, see a tax that they truly object to. It’s all part of the plan………..
OK… It’s the redistribution thing…. Your money belongs to the state because they are much better at spending it…
The Pantagraph article is about the growth of the online house renting business, Airbnb and a rather modest tax of 6 percent payed by the renters. The article never stated that the 275,000 or any other amount was only from the 6 percent tax. The amounts quoted included the 6 percent tax. There was never any attempt to “deceive” readers. After reading and re-reading the article, you’re making a mountain out of a molehill.
I believe hotels you’re talking about are taxed at 12 percent. In most cities Airbnb is heavily regulated and taxed even higher. There have been issues with price gauging and wild parties at different Airbnb’s which have lead to their regulation and in some cases calls for licensing.as If you’re running a Bed and Breakfast. You have to have a license, the same if you’re running a hotel/motel. Why shouldn’t it extend to short term rentals with random people coming in and out of private domiciles? Bloomington is doing that, its just collecting a tax.
It seems to me that Bloomington’s city manager’s projections could be valid. You don’t have a crystal ball as to how this business will or won’t grow. Who knew ride sharing will become a big industry? That’s certainly analogous to home sharing. Perhaps it will grow and become a good source of tax income like hotels. it seems to be a good source for other cities. Evidently a new sources of public income matter how much is frowned upon here.
$275,000 was gross sales – the tax hadn’t gone into effect yet. Hotels do pay 12% – 6% goes to the state. Airbnbs are regulated by people who use them – on line reviews. They don’t need government interference.
As soon as I saw he used the phrase “rather modest tax of 6% paid by the renters” I immediately knew exactly the mindset of this individual. He also seems very concerned with making sure the government, small or large, national or city, is being fed and fed well so that it can grow and grow and grow.
Here is an idea, when you make such claims and comments do a little homework first. That way you don’t come across so stupid Paul.
Wrong, cities all over the United States and Europe regulate Airbnb. From the number of days you can rent out your house to having to register your Airbnb.
“An ordinance that would add new regulations for short-term rental housing on Airbnb and other vacation rental websites was approved Tuesday by the Los Angeles City Council.
The ordinance would limit short-term rentals to people renting out their primary residence for vacation rentals and prohibit apartment conversions into what some have called “rogue hotels.” The regulation defines a primary residence as one where the host lives onsite for at least six months.”
If you look up any large city they have place regulations on home sharing.
“Passage of the ordinance follows three years of debate on regulations involving Airbnb, which in 2016 struck a three-year deal with the city of Los Angeles to pay hotel taxes on behalf of hosts. The company’s hosts have been responsible for more than $100 million in transient occupancy tax collections for California’s largest city since August 2016.”
You could have Googled any large city and find out their regulations and laws concerning Airbnb. Perhaps that’s what you should have done before you wrote something that isn’t true
My remarks on the tax percentage has nothing to do with government being “fed”. I was remarking that most cities have tended to tax Airbnb at a higher rate than 6 percent. They have also passed laws ensuring against abuse of the housing market by Airbnb, which in cities that have thousands of Airbnb rentals is a problem.
The story was about the media having no concept of numbers. It has little to do with the logic of taxing Airbnbs. We already know if it moves it gets taxed.
It gets taxed if it just sits there too it seems, well, depends on who owns it I guess…and yes, it has everything to do with the Govt. being “fed” Paul, engrave it into your brain – the GOVERNMENT pays for NOTHING, tax payers do, and in and of itself PROVIDES NOTHING because it actually generates zero actual money and it produces nothing, it only COLLECTS money through endless taxes, fees and “licenses” that it redistributes to the chosen recipients. A LOT of people do NOT want to feed the constantly hungry monster that is big government and don’t even start with how the government provides us with SOOOO much, most of it could be done by private enterprise at a lower cost. A safety net, ok, for the TRULY disabled and elderly is a good thing that I will admit but it too has gotten terribly out of control they simply want a piece of the action in ALL things now, yard sales, private rentals, airbnbs, private taxi services, lemonade stands for God’s sake, it NEVER ends.
What’s the going price for a “journalist” soul? I’m going with a $30-$40 hair cut, a little vanity and an elbow rub with a Friends of the BCPA ruler.
I see in today’s online Pantagraph, they are begging for subscribers. The entire article is putrid…I think the writer actually used the word integrity and local journalism in the same article. 🤢
Love how the Pantagraph researched this story (ie none) and today they hss a story on how important they are to the locals. They used information on school and other closings as an example. Well guess what. The closing are done by a computer program. The closed whatever contacts a computer at source (newspaper), types in a password and then enters information which is magically put on line. Here is a thought, if the damn government were interested in serving the people they would be spending money to do this. But no it is more important to support BCPA and the Judydome.