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Mystery Buffalo Hotel Owner Owes $500,000
 In Past Due Hotel Occupancy Taxes

By Matthew Spina, The Buffalo News, N.Y.McClatchy-Tribune Regional News

Jun. 21, 2007 - Comptroller Mark C. Poloncarz and other county officials have denied requests made under New York's Freedom of Information Law to identify the hotel owner who has kept $500,000 in bed taxes that must be forwarded to county government.

Poloncarz, in a May audit, had said aides to County Executive Joel A. Giambra should have done more to collect from the delinquent hotel owner, who has frustrated county officials for at least 14 years.

The bed tax had been charged to hotel guests but never turned over to the government, even though officials customized three payment plans for the hotel owner since 1993.

Poloncarz says a clause in Erie County's 1974 law establishing a tax on motel and hotel lodging forbids him from identifying the delinquent company.

That stance puts him -- and the county lawyer who advised him -- in direct conflict with the Freedom of Information Law, according to an expert on New York's sunshine law.

"A local law cannot make confidential what is accessible under a state statute, such as the Freedom of Information Law," said Robert J. Freeman, who for 31 years has served as executive director of New York's Committee on Open Government.

The county's 1974 law forced hotel and motel owners to document the amount of tax they had collected but assured them privacy on any data that would reveal their rents and occupancy rates.

The law went on to say that a county Finance Department official who reveals the information found on a hotel's quarterly bed tax payments -- its "returns" -- can be fined, jailed or expelled from office.

The Buffalo News has sought the delinquent owner's identity through a request for records under the Freedom of Information Law.

The newspaper did not seek quarterly returns. It asked for copies of the repayment agreements and suggested officials delete protected sales data.

Poloncarz's aides conferred with Assistant County Attorney James Tuppen and denied the newspaper's request, saying they were bound by the county mandate that quarterly returns remain secret. Then they denied the newspaper's appeal.

A third News request, for correspondence between the government and a specific hotelier, is pending.

One of the comptroller's aides assigned to handle requests for documents said the office must "protect the privacy interests of the reporting entity or individual."

Even if they removed sales data and identified the operator, he said, some protected information had been revealed in Poloncarz's May audit, which referred to the offending hotel owner only as "Beta."

The audit by Poloncarz and audits by then-Comptroller Nancy A. Naples in 1996 and 2002 show county officials have waged a sporadic and largely futile effort to collect.

The hotel owner's first repayment agreement was written in 1993, under then-County Executive Dennis T. Gorski. When the owner fell behind, a new agreement was negotiated under Gorski in 1996, and a third was set in 2003, under Giambra.

As of May, the hotel owner was 20 months behind. At no point has the county gone to court, which would throw the collection effort into the public realm and identify the hotelier.

Freeman, after reading the county law and the letters between The News and Poloncarz's staff, said county officials did not address the newspaper's specific request -- for repayment agreements.

He said any agreement between a government and another entity is a public document. Further, the county cannot use its own law to override the state's Freedom of Information Law, he said.

The bed tax finances the Convention and Visitors Bureau's campaigns to draw visitors to the region. So there are hotel operators who want the government to aggressively pursue delinquent payers, even if it means naming them.

"I have no problem with that because obviously what they are doing right now is not working," David Hart of Hart Hotels, the Convention and Visitors Bureau's immediate past chairman, said of the county's collection effort.

"The CVB works for all hotels," he said. "All of us benefit. We are collecting and remitting the tax. If someone collects the bed tax and doesn't remit, should they be entitled to benefit from the CVB's efforts to bring business into town?"

Tuppen, the assistant county attorney, said Freeman is right that local laws cannot create exceptions to state laws. But the county's tax laws are authorized by state legislation, so he argues the secrecy provision was authorized by state government.

"We are better served by erring on the side of caution to protect the officers," Tuppen said, referring to the chance that county officials could be penalized for disclosing too much information. "That's a very practical point that's important to the officers."

mspina@buffnews.com

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Copyright (c) 2007, The Buffalo News, N.Y.

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