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Will an admission tax raise ticket prices at Kings Island next year?

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Published: November 11, 2009 at 10:14 AM

The Mason, Ohio town council will vote Nov. 23 on enacting an admission tax that would add 3 percent to Kings Island tickets and 5 percent to parking fees at the Cedar Fair-owned amusement park.

Kings Island

The council member who is proposing the tax said that it will raise an unspecified number of "millions of dollars" to pay for infrastructure repairs and improvements. The park said that it will depress attendance and cause it to lay off employees and cut back charitable contributions to the community.

According to the latest TEA/ERA report, Kings Island attracted 3,126,000 visitors in 2008 (2009 data is not yet available). Cedar Fair reported to the SEC that its average guest spent $39.73 per visit in admission, parking, food and merchandise in 2009. Cedar Fair also reported that admissions represented 56 percent of its revenue to date in 2009, so let's take $22 per visit as a very rough estimate of Kings Island's attendance revenue.

Cedar Fair also reported at 6 percent decline in attendance at its parks in 2009. Using that same figure for Kings Island, that gives the park an estimated 2,938,440 in attendance this year. Multiply that by the $22 per visit, and you've got $64.6 million in admission revenue. Three percent of that is about $1.9 million. Figure about three people per car and a $10 parking fee, and you're looking at about another half-million bucks for the parking tax.

That's about $2.4 million total from the proposed tax.

Is it worth it?

My view is that cities responsible for providing roads, sewers, utilities, security, planning and inspections at and immediately around a theme park absolutely should tax the park and its visitors for those services. If pay for park employees isn't sufficient to cover their basic living expenses and health care, then taxes from the park should help pay for public assistance to those employees as well. Local taxpayers shouldn't have to subsidize the expense of having that park in the community. (If they choose to do so, as an inducement to get a park to locate there, fine, but that's their choice. They shouldn't have to do it, though.)

At the same time, visitors to the park shouldn't be soaked to cover the costs of a community's other expenses, such as infrastructure elsewhere in the community, schools and public assistance to people not employed by the park. (So, Florida, quit soaking your tourists for basic state expenses and enact your own state income tax.)

I don't know what the Mason council envisions doing with this money, or how much it currently gets from Kings Island and its visitors. But I thought that some calculations might be helpful in letting the public know just how much money we're talking about here. Thoughts?

Readers' Opinions

From Michael Owen on November 11, 2009 at 11:14 AM
It sounds like a reasonable policy, I just think it's the wrong time to implement it.

Attendance is down this year all across the world and it's most likely to stay low for a large part of 2009. That means Kings Island aren't going to want to charge customers any more because of a new tax put in place. My guess would be that Cedar Fair will absorb the increase in taxation rather than pass it onto the consumers, at least for the time being. In the future we may see prices increase over and above the rate of inflation in order to cover the tax, but I doubt that will happen in the near future.

My main question would be what impact will this have at Kings Island? Will this mean that we may see staff lay-off's? Surely the local council won't implement a tax if they know it's going to lead to an increase in unemployment?

Taxation is naturally a big issue with regards to the amusement park industry, whilst parks do create a lot of jobs there's not much else they offer to the local economy outside of taxation. Most park guests pay to park in the parks own lots, they buy their food on-site and generally don't spend much if anything outside of the parks, meaning taxation is integral for the local economy to feel the positive side of having an amusement park in the local area.

From Todd Houts on November 11, 2009 at 11:32 AM
I'd want to know - is Mason's city sales tax already being applied? Best I can gather, Ohio state plus county tax in Mason is 6.5% (source: Ohio Department of Taxation) and according to Bestplaces.net the overall sales tax in Mason is 7.00% - which would imply a city tax of 0.5%.

Why should the visitors to King's Island pay the equivalent of an additional sales tax unless some kind of a TIF is put in place that requires the additional tax to fund specific infrastructure improvements to support King's Island? TIFs usually also have a sunset date that should become effective when the tax collected has offset the costs (including maintenance for x number of years).

My concern is the council is looking to use the park to fund some shortfall - but experience with cities show they're just as likely to give a tax break to a new industry moving in town even though that also will cost infrastructure improvements. (Not saying Mason has done the latter.) Assuming the existing sales tax applies, they're already getting sales tax from 3 million people spending money in their town. And if the current sales tax doesn't apply - that certainly should be remedied.

From Derek Potter on November 11, 2009 at 11:43 AM
I'm in agreement with you Robert. If this money is going to improve infrastructure around the park (roads, sewage, traffic lights, etc), then fine. I'm not sure what exactly they have in mind, as the area around Kings Island looks in pretty good shape to me.

Economic times are bad though for many cities, which means less tax revenue. When that happens, it's really easy for the city to try and ring the local cash register (Kings Island in this case) and take more money. If half of the money they would collect from this increase were used for anything remotely related to Kings Island, I would be surprised. Call me cynical about government, but I'm pretty sure they won't hesitate for a second to "redirect" the money away from what it's supposed to be for. Perhaps they should also remember the effect that the park has on the local economy as well. All of those hotels are built there for a reason, and they fill up during the summer (and pay more room tax) for a reason. Restaurants and gas stations see more business too. Thousands of jobs are created each season, and I'm sure that Kings Island does it's share of charitable work.

Kings Island Drive is in good shape, as are the interchanges from I71 and the overpass of I71. The local roads in Mason (that only locals would use to get there) may be taking a hit, but one could argue that the slow moving, seemingly endless Cincinatti rush hour is just as responsible...if not more so than Kings Island traffic. Park attendance hasn't increased or decreased much at all...remaining around 3 million for a long time now. That said, there is likely a slight cost increase to repair and fix things, but what are they going to fix? People complain about parking prices all the time. Most of the time they are raised because of things like this.

My outside opinion, the city government doesn't need the money, they want it... so that they don't have to make cuts to anything, when they are probably overspending and/or wasting. Mason is a fairly affluent community with plenty of business happening.

From Anthony Murphy on November 11, 2009 at 12:25 PM
Sorry, not exactly related, but I was called yesterday from the service that renews Six Flags Season Passes (good deal right about now for 2010) anyway, I asked if Six Flags was going to remain open because if they close, we season pass holders would be penalized for buying early. Anyway, she said, yes, Great America will be open, but she also mentioned there is one Six Flags park that is not having season tickets aka might be closing.

Any ideas?

The headline just reminded me of admission to Six Flags

From Joshua Counsil on November 11, 2009 at 12:59 PM
Your views are completely valid, Robert. Does the council mention anywhere exactly what they intend to spend these new taxes on? Like you said, are they limiting their expenditures to resources around the park, or are they pulling a Florida and using the extra money to finance the community's expenses?
From 74.97.254.130 on November 11, 2009 at 1:28 PM
I live in Florida and work at the parks... but I do NOT want to pay income tax! So instead of Florida adding it, I say the rest of the country should get rid of it!!!
From Randy Clover on November 11, 2009 at 2:36 PM
Just an outside view, but the shopping centers across from the park also uses that stretch of road... will they put in an extra tax on it? Yes I know I am playing devil's advocate here but where does it stop and/or start.

As for KI not bringing anything else to the community since people spend money in the park, that is not true at all. The park creates jobs, visitors that need places to stay, taxes from gas, snacks, soda, restaurants (some people do dine outside the parks) as well as others. Having a major attraction like a theme park can also influence other businesses to the area. They are more likely to be able to recruit talented people that want to work in an area where there are things to do. Amusement parks do add much more to an area than many people think.

From Michael Owen on November 11, 2009 at 3:32 PM
Sorry Randy, I didn't mean to say they bring nothing to the community, as I did mention the jobs and of course tax revenue. I just think that parks seem to offer less to the local economy than other tourist attractions, as most things a guest would want are provided on-site.

The thing with Kings Island is that I doubt too many people will be visiting more than one or two days in a row, which means the demand for hotel rooms is likely to be minimal.

From Robert Niles on November 11, 2009 at 3:38 PM
Here's the deal: Doing this math really isn't difficult. Readers (you guys) want to see the numbers. We can figure out how much each player is bringing to the table in terms of incremental tax revenue, and how much each is taking off, in terms of incremental infrastructure and social expenses.

From there, it's arithmetic to figure out whose rates need to be adjusted. It just drives me a little nuts when politicians initiate these discussions without showing us the math (that their staff members can and should be doing), and news media report on them without looking at or passing along the numbers, either.

Without numbers, these debates get reduced to moronic "taxes r BAD" versus "business r BAD" debates. Yuck.

From Andy Guinigundo on November 12, 2009 at 11:22 AM
I live within 10 miles of KI, and here is what I think. I think the city is like every other city in Ohio - struggling to make ends meet. I think that Mason is looking at KI like it’s an untapped oil well. They look across state lines to places like Aurora, Indiana which is a little city with streets practically paved with gold due to a casino tax money.

There are other big industries in Mason surely getting tax breaks (Cintas, perhaps). They bring in tons of employees, but do not bring people in to hotels, restaurants, etc.

The City council can do what they want I suppose, but I believe it is self-serving and in the long run will hurt more than it helps. If I am not mistaken, previous councils "promised" they wouldn't impose a tax like this when they annexed KI into Mason. Politians....

Cedar Fair can't/won't necessarily take the $2.4 million hit either considering there is a $30 million coaster going unused. So they might have to pass this along to the consumers.

I'm trying to reach the KI spokesman for comment.

From Joshua Counsil on November 12, 2009 at 12:55 PM
There's usually a reason they don't want us to see the numbers - the people who actually care will interfere.
From Rod Whitenack on November 12, 2009 at 12:59 PM
Criswell knows all! Let me look into my crystal ball. Ah yes, I see it now. It's all clear to me. Criswell predicts more business for Holiday World!

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