The executive director of the Lancaster County Convention Center Authority on Thursday publicly proposed an increase in the county's hotel room tax.

Kevin Molloy, whose position has not been adopted by the board of the public authority, said he raised the specter of a higher tax to start a public discussion.

"If someone sees a better answer, I'm open to that, but I don't see it out there right now," Molloy said.

His proposal would increase the tax on a county hotel room from 3.9 percent to 5 percent. It would add about $1 to the average cost of a room and is not likely to depress room demand, Molloy maintained.

The increased revenue would be used for payments on the convention center's construction debt and still could provide funding for Pennsylvania Dutch Convention & Visitors Bureau to market the county as a tourist destination.

Molloy's recommendation comes two months before the authority's reserves are expected to fall below a $5.25 million threshold required by lenders. When that occurs, under the county's hotel tax law, the 20 percent of the tax revenue now going to the visitors bureau would automatically be redirected to pay authority debt.

The three county commissioners, whose action would be needed to raise the tax, were cool to the idea.

"Raising the tax is probably the easiest thing to do, but that isn't always our role to do the easiest thing," said Scott Martin, chairman of the three-member board.

Commissioner Craig Lehman said he supports looking at any option except increasing the tax.

And Commissioner Dennis Stuckey said, "Kevin Molloy can request and suggest and ask us what he wants to from his perspective as executive director, but while he references an April time frame, we are not at a point in time where we have turned over every stone to solve the convention center's financial problems.

"Are there other solutions that we haven't thought of yet?"

Molloy said his concern is the loss of the $900,000 per year that goes to the visitors bureau. That marketing money is essential to the long-term viability of the convention center and to all of the county's tourism industry, he said.

Yet the visitors bureau itself is not embracing the higher tax plan.

Christopher Barrett, president and chief executive officer of the PDC&VB, said his board voted about two years ago to oppose any increase in the tax.

"We felt other alternatives should be exhausted before that eventuality should be considered," Barrett said Thursday.

In fact, the visitors bureau has established a task force to look at alternatives. The task force met for the first time two weeks ago. Its members first will look at the financial condition of the convention center and talk to interested parties, and they might call in experts, Barrett said.

"We're going to bring everybody to the table so we can advance a community-based solution," he said.

Martin said the county also will be taking a close look at the center's financial situation.

"We will find out where every single penny goes in that facility," he said.

Molloy maintained that will be favorable for the authority.

The convention center is doing what it is intended to do, he said. Costs are coming in under budget, and event bookings and sales revenue are exceeding expectations.

"Since opening in June of 2009, the convention center has brought more than half a million people, most of that new business, to Lancaster County — drawing an average of 15,000 attendees per month and generating a broad spectrum of economic growth, including an average of 1,500 overflow hotel room nights per month," Molloy wrote in his position paper.

"Overflow" refers to rooms outside of those booked at the 299-room Lancaster Marriott at Penn Square hotel, which is attached to the convention center.

The authority's financial problem is largely not of its own making. While revenue from convention center events pays for operating costs, the shortfall is in the money that pays down the authority's construction debt.

Debt payments are supposed to come from the county hotel room tax. With the prolonged economic downturn, that tax revenue has been lower than projected.

The lower revenue is a reflection of historically low hotel room occupancy, contends the Greater Lancaster Hotel and Motel Association.

Representatives of the association, which represents the county's hotel and motel operators, appeared before the county commissioners last week. They contended that the tax has been a hardship for hotels, saying it adds to the costs of their rooms and that any increase would hurt the price-sensitive tourism market.

Association representatives further contended they have neither benefited significantly from center events nor from the increased tourism marketing.

The association has taken a position against any increase in either the 3.9 percent room tax or a 1.1 percent excise tax. All the excise tax revenue, about $1.38 million annually, goes to the PDC&VB for tourism marketing.

bharris@lnpnews.com