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A Good, but Incomplete Idea 

The Transient Room Tax increase leaves questions unanswered


Let's be clear: We approve an increase in the Transient Room Tax for the City of Bend, as proposed by Measure 9-94 (not to be confused with Measure 9-96 for a similar room tax increase in Deschutes County). In fact, we think that the TRT for the City of Bend should be more ambitious.

The proposal—which is being presented to voters for approval on Tuesday, Nov. 5—is to increase the fee charged to visitors staying in City of Bend hotels and resorts from 9 to 10.4 percent over two years, a modest increase—and an especially modest proposal considering that the rate hasn't increased since 2003, while cities like Portland and Boulder have room taxes in the mid-teens.

What's more, we believe that funds are wisely earmarked: It is estimated that the tax increase will bring in approximately $650,000 annually, with $300,000 designated for tourism promotion (particularly winter season tourism), $200,000 going to public safety, and the remaining $150,000 earmarked for the promotion of arts-related tourism. Emergency services clearly need the additional funds, and a dollar spent on marketing tourism can easily be expected to double or triple itself in tourist revenue here.

Bottom line: Yes, we believe that this is a reasonable request to increase the room tax, and that finding funding from largely external dollars (i.e., tourists staying at local hotels) is a smart consideration, and moreover, that the funds are earmarked as a great investment in the community.

Where we are concerned is that the details for figuring out who will decide how these funds are spent and the mechanics about how they are spent are far from settled, even though the measure goes to voters in less than two weeks.

We seem to be alone in this assessment: Despite some initial resistance by a handful of Bend hoteliers concerned that a higher tax would dissuade some visitors, the ballot faces little, if any organized opposition. The voter's pamphlet includes only one statement of opposition, from local resident David White, who argues that tourism has sufficient funding and an increase is unnecessary. In a June letter to the Source, White advocated for repealing the tax altogether (see this week's Letters to the Editor as well, pg. 5). We don't agree with that assessment—but neither are we impressed with the proposal's strength or completeness.

When questioned, the initiative's lead proponent didn't disagree that the mechanisms for distributing the funds were not complete, but he did tell us that we simply need to "take a leap of faith."

That is troubling. In an endorsement interview for the measure, Visit Bend CEO Doug La Placa explained to the Source that, should it pass on Nov. 5, they have penciled out three possible approaches for disbursing the funds earmarked for arts and cultural tourism promotion. The first option, and Visit Bend's preference, is the creation of an independent non-profit entity tasked solely with determining which grant applications to approve. Beyond that basic idea, however, there are, at best, ambiguous, plans: La Placa can't yet say who would be on that granting body, or even the number of the members and how they would be selected, but one spot would be reserved for a Visit Bend representative. The second option is to let the Arts and Culture Alliance take on that task, likely with a subcommittee comprised of members of the local arts community—and the requisite Visit Bend representative. Deschutes County Historical Society Executive Director Kelly Cannon-Miller attended the Source's endorsement interview and seemed to favor this option. The Arts and Culture Alliance is a membership organization which includes about two dozen local venues, event organizations and culture nonprofits—essentially the very same entities that would be requesting the funds collected from the TRT increase. (Yes, see where that might create a conflict of interest?) The third option, apparently unpopular with both La Placa and Cannon-Miller, is to have the Visit Bend board appoint a committee to handle the disbursement of the anticipated $150,000 in earmarked income.

And, it is not just who will decide how to spend these funds that is not yet determined, but it is also not clear how those decisions will be made. Though the tax measure has been in the works for about a year, La Placa told us that there simply wasn't time to pin down all the details before the November election. "It didn't make sense to go through all of that work and envisioning if the tax was not going to be there," La Placa explained. He added that the priority was to get the measure on the November ballot, so that it wouldn't have to compete with school and fire bond measures in May. He defended the lack of details by referring to the measure's long list of supporters, suggesting that community members who doubt the integrity of those involved should be reassured by the trust others have placed in them. "If the fear is that once this measure is approved that Visit Bend or the lodging/tourism community would pull rug out from under...look at list of supporters," La Placa suggested. "Through processes like this one there has to be that leap of faith."

We certainly don't agree that a ballot measure should be a leap of faith into the fog.

Voters deserve a more complete plan to assure that these funds will be governed efficiently and money spent effectively. Consider an analogous scenario: A year from now, an arts organization requests funds from the TRT coffers. Wouldn't we expect that the decision-making body for those funds—whomever that may be—would request a clear plan and details about the project, and more than a simple explanation, "we want funds because we do good work; trust us." Moreover, not only does Measure 9-94 lack a granting body, its backers have not outlined how it will address potential conflicts of interest between granters and grantees. If Visit Bend moves forward with the second option—establishing a memorandum of understanding with the Arts and Culture Alliance—the people deciding who will receive funding could be the same people applying for funds.

"Isn't self-dealing the nature of grant dealing organizations?" La Placa asked, adding that no matter the way that granting body is set up, it will be subject to politics. Cannon-Miller added that while the decision makers will likely include members of the arts community regardless of which approach is chosen, the stringency of grant requirements will ensure that funds are fairly disbursed. "To me," La Placa said, "the bigger issue is that the city will finally have allocated long-term funding for promotion of the arts."

We certainly agree that such funding is important—and, with reservations, endorse a "yes" vote on Measure 9-94, and hope that this leap of faith finds solid ground on which to land.

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