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The Secret Hotel Tax Deal 

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If you, or we, owed the City of Bend a couple of thousand dollars in taxes and told the city, "Okay, how about if we pay half of it and forget the rest?" the response probably would be something along the lines of: "Are you SERIOUS?!?"


If you're a hotel owner and you owe the city a couple of hundred thousand dollars, however, it's a different story.

An audit the city did earlier this year found that a half-dozen local hotels owed more than $340,000 in room taxes. The dispute centered on a since-repealed provision of the tax code that said hotels that offered guests a free breakfast could deduct $10 per person when calculating the room tax guests owed.

The hotel owners had argued for that provision by claiming they needed it to keep their rates competitive with those of hotels in other tourist destinations. Their credibility wasn't helped by the fact that, as it turned out, they had continued to collect the full amount of tax from their guests and then quietly pocketed the difference instead of paying it to the city.

The hotel owners lawyered up and announced their intention to fight the issue, and this week the city decided to cut them a break - a $200,000 break. The city and the six hotels involved negotiated a legal settlement under which the hotels will pay less than half the full amount of taxes owed - $136,328.25, to be precise. The city council approved the deal 5-2, with only Councilors Jodie Barram and Jim Clinton dissenting.

The agreement saves the city the expense of a long, drawn-out court battle, and we can't really fault the city for wanting to avoid one - especially considering its rather dismal recent track record in the courts.

What's harder to understand, or excuse, is the city's consent to putting itself under a gag order. The terms of the agreement state: "If public comment on this agreement is required by the media, [hotel] Operator or the City in its official capacity will simply state the terms of the agreement in general language and that the parties have in good faith worked together to resolve their dispute."

The City of Bend in recent years has tended to go off the rails when it makes decisions in secret - decisions like paying more than $2 million for a master plan for a grandiose mixed-use development that looks unlikely to ever get off the ground, or spending more than $200,000 for buses that appeared to have been engineered by the Marx Brothers and built by the Three Stooges. So we're more than a little queasy when it reaches a $200,000 agreement behind closed doors - and then city councilors put a muzzle on themselves so they don't have to explain or defend that decision to the press or public.

Councilors Barram and Clinton deserve thanks for making a brave, though losing, stand for the principle of transparency in government. For the other five, we're delivering five versions of THE BOOT in appropriate styles and sizes.

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