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LOCKPORT – The city is likely to raise its bed tax on hotel and motel bills from 4 percent to 5 percent, with the extra money being used to pay for the Towpath Trolley, the summer tourist shuttle service.

Mayor Michael W. Tucker said that he favors the increase, which was proposed by John Percy, CEO of the Niagara Tourism and Convention Corp., the county tourism promotion agency.

“Certainly, it’s a good, viable way to keep the trolley going,” Tucker said.

The Common Council has scheduled an Aug. 7 public hearing on renewing the bed tax law, and it is expected to discuss the figures at a work session Wednesday.

The city takes 5 percent off the top of the bed tax receipts for administrative costs, and it keeps 25 percent of what’s left for its own promotional projects, City Treasurer Michael E. White said. The tourism agency takes 75 percent of the revenue.

An increase of one percentage point in the tax would bring in about $25,000, Tucker said, and that is about what it costs to operate the trolley for one season.

It makes several circuits of a one-hour loop around Lockport each day, connecting the hotels with the tourist attractions and shopping areas.

The tourism agency is paying for the trolley this year, under an arrangement with the city. Percy said he and tourism agency board Chairman Frank Strangio suggested the increase to 5 percent.

Niagara Falls adopted the hike, with the extra 1 percent reserved for the operation of the Route 62 trolley, which serves a similar purpose to that of Lockport’s Towpath Trolley.

Tucker said he wants to meet with the owners of the city’s hotels before the Council increases the tax.

“I wouldn’t do it without talking to the hoteliers first,” the mayor said. “They’ll have to increase their rates 1 percent.”

Like Niagara Falls and the county, Lockport’s 10-year contract with the Niagara Tourism and Convention Corp. ran out in February. The County Legislature approved a one-year extension pending further negotiations, but Lockport has yet to act.

Percy said Lockport’s bed tax payments to the tourism agency are in escrow, pending action on an extension.

email: tprohaska@buffnews.com