Editorial: Hotel tax increase should die

Bend’s City Council should have no problem rejecting a proposal to ask voters to increase the city’s room tax when it meets tonight. After all, even Visit Bend, the agency that has the most to gain from an increase, has backed away from endorsing the idea.

Currently the city charges visitors 9 percent for the privilege of renting a hotel, motel or other overnight lodging in the city. If the council approves, voters would be asked in May to raise that rate to 11 percent. Deschutes County, meanwhile, collects a slightly smaller amount from visitors using lodging outside the city limits.

Most of the money thus raised goes to Visit Bend, which markets the community in Oregon and elsewhere. About a third is directed to the city’s general fund.

Yet while the tax falls equally on visitors to expensive and inexpensive properties alike, its impact on the businesses themselves varies.

Some large properties don’t want a tax increase because they must bid competitively for the conventions they seek; some small, less expensive ones often do not believe tourism promotion benefits them in any serious way. Other, more expensive properties see the rate increase as a direct way to increase their business.

There is also an element of competition for every property owner. At 9 percent, Bend’s room tax is on a par with that charged in the city of Ashland and a fraction lower than what is charged in Medford. It’s a bit above the rate paid in Seaside, and more than 4 percent below what a hotel visitor in Portland will pay. If cost helps determine destination, Bend’s current rate is competitive.

Meanwhile, councilman Victor Chudowsky has said he will oppose the tax increase proposal, in part because of lack of unity in the tourist housing community.

It’s a position that makes sense. With no broad agreement on whether an increase is needed or not, the full council has good reason to let the matter die.