Editorial: Consider risks in room tax rate increase


Published Feb 3, 2013 at 04:00AM / Updated Nov 19, 2013 at 12:31AM

As the Bend City Council weighs the idea of increasing the city’s transient room tax, it must be careful to do its homework thoroughly. Though the tax is paid by those who visit the area, an increase would have an impact on the community, as well.

If it were referred to voters and approved, it would mean more money for the city’s general fund, perhaps $250,000 in the first year. That’s small potatoes in a pot that currently holds more than $33 million, less than 1 percent of the total. A little more than twice that amount would go to efforts to draw tourists to the region, meanwhile, and Visit Bend has said that money could go to draw more out-of-state tourists.

While a transient room tax increase may not deter some potential visitors, lower taxes could persuade some families to choose Bend over other similar communities.

Also not all lodging is the same. Most hotels and motels in Bend rely heavily on individual bookings by those who choose to come to the area and find lodging to fit their needs. Others, including two of the largest in the city, Mount Bachelor Village Resort and The Riverhouse Hotel & Convention Center, are much more resort-like, with enhanced recreation opportunities on the property and the ability to house conventions of several hundred visitors.

Those sorts of businesses could be hurt by a tax increase. They often are asked to bid on a coming convention, and the bidding is darned competitive. An increase in room taxes, which must be disclosed on such bids, could well be the item that takes those putting on the convention elsewhere.

The city needs to research such questions thoroughly before deciding whether or not to ask for a room tax increase. At some point a tax becomes high enough to discourage the behavior being taxed, be it smoking or visiting Bend. The city needs its tourists and the businesses they support. It cannot afford to cross that line between an acceptable tax and one that is too high.