Editorial: Council should put tourism tax on the ballot

Published Jun 30, 2013 at 05:00AM

Wednesday’s town hall meeting about tourism taxes in Bend had something you rarely hear in a meeting about taxes: applause. It had something else, too: a reasonable compromise that the Bend City Council should put on the ballot.

People weren’t necessarily applauding because they all support increasing the hotel tax rate. They also weren’t applauding because someone made an eloquent speech against the tax increase.

If we had to guess, what earned applause is that going into this series of gatherings there were two sides with little common ground on the tax increase. Coming out of the meetings, the two sides found compromise and had a polite and substantive exchange of views.

In February, a group of hotel owners, tourism officials and others proposed increasing Bend’s lodging tax to 11 percent from 9 percent. It might raise some $850,000 in total. In a formula decided by state law, 70 percent of that additional money would go to promoting tourism, and 30 percent would go to the city’s general fund.

Some hotel owners didn’t and don’t like the idea of again raising taxes on their customers. Customers can be very price-sensitive. And those hotel owners weren’t convinced they would see much benefit from any increased tourism spending. It’s also hard to escape the principle of economics that when you tax something, you get less of it.

The compromise that representatives of the two sides agreed to is basically an increase in the lodging tax of 1.4 percentage points in two steps.

The compromise does not make everybody happy. “But we’re moving forward toward a common goal of wanting to have more tourism and tourism spending in Bend,” said Dave Rathbun, the general manager of Mt. Bachelor ski area. He had opposed the initial proposal.

The Bend City Council has a special meeting scheduled for July 10 to consider putting the compromise on the ballot. It should include substantial plans to review the tourism spending to ensure it works.

It should also look in the future at ways to broaden the base of the tax. A tax on lodging does capture tourist dollars. But it also places the tax burden for attracting tourism on one segment of the business community when so many others benefit from Bend’s tourism.