Friday, February 27, 2009

Trimming the Tourist Industry's Juicy Cut

A move's afoot in the state Legislature to change the formula under which the tourist industry gets the lion's share of room tax revenue, and

Posted By on Fri, Feb 27, 2009 at 2:03 PM

A move's afoot in the state Legislature to change the formula under which the tourist industry gets the lion's share of room tax revenue, and the industry is squealing.


Under present state law, 70% of the funds generated by taxes on hotel rooms and other visitor accommodations must go to tourism promotion and facilities. That's a huge windfall for organizations like the Central Oregon Visitors Association (which, according to Director Alana Audette, got nearly half of its $2 million operating budget from transient room taxes) and its counterparts throughout the state.

So they're not at all happy about Senate Bill 440, which would uncouple the room tax from tourism and allow the money to be used for anything the city or county that collects it sees fit.

According to KCBY-TV in the coastal town of North Bend, Katherine Hoppe, director of promotions and conventions, told the city council Tuesday night: "Right now because tourism generates lodging tax, which the majority of which the cities keep already, we feel like when you invest back into tourism, you're already investing back into the cities because you're creating a larger tax base the more visitors you bring in."

If you can figure out the logic in that George W. Bushian statement you probably should be a professor of philosophy at Oxford.

The more coherent arguments The Eye has heard for spending 70% of room tax revenue on tourism promotion are (A) that tourists bring in money and create jobs and (B) that tourism encourages businesses to locate here because their executives visit the place, fall in love with it and decide to move their businesses here.

As for Argument A: Tourists undeniably do bring in money, and the tourist industry does create jobs. But they're mostly low-wage, no-benefits, often part-time service jobs. And at the first downturn in business those jobs are gone. Tourism is a nice adjunct to the local economy, but it'll never be a solid foundation for it.

Argument B is even shakier. We've been promoting the hell out of Central Oregon as a tourist destination for decades, and very few big private-sector companies that pay living-wage jobs have been lured in. A CEO might visit Bend, like it and buy a vacation home in Broken Top or Pronghorn, but that doesn't mean he's going to move his company here; decisions like that have to be based on more hard-headed calculations.

The City of Bend took in more than $3.4 million from its 9% transient room tax in the 2007-2008 fiscal year. Suppose we devote one-third of that to tourism promotion instead of 70%. That would put almost $1.4 million more a year in the city's treasury.

Without even trying, The Eye can think of a half-dozen better things than tourism promotion to spend it on - like plowing the streets, fixing potholes and keeping cops on the force.

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