Wallowa County moves ahead with lodging tax hike

Wallowa Lake business owner files challenge
Kathleen Ellyn

Wallowa County Chieftain

Published on August 22, 2018 8:52AM

Kathleen Ellyn/ChieftainThe needs and usages of the Wallowa County Fairgrounds have changed over time as this old set of betting windows under the grandstand demonstrates. A portion of the lodging tax increase would go to fund improvements at the fairgrounds.

Kathleen Ellyn/ChieftainThe needs and usages of the Wallowa County Fairgrounds have changed over time as this old set of betting windows under the grandstand demonstrates. A portion of the lodging tax increase would go to fund improvements at the fairgrounds.

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Wallowa County Commissioners completed the legal process required to place a proposed Transient Lodging Tax hike on the Nov. 6 ballot.

Commissioner Susan Roberts voted against the measure and Commissioner Paul Castlleja voted in favor of the measure while simultaneously expressing concern “about what you folks (commissioners) are trying to bring forward.”

The measure, approved Aug. 16, asks voters to approve an additional three percent tax on lodging in the unincorporated areas of the county. Businesses in unincorporated areas already pay five percent collected by the county.

The often-requested total of how much money would be generated through the tax was finally provided in the language of the ballot title: an estimated $129,520. The county already collects approximately $360,000 in lodging tax, according to County Commissioner Todd Nash.

The new revenue raised annually would be split 70 percent for fairgrounds redevelopment and operations (estimated at $90,720) and 30 percent for the sheriff’s office (estimated $38,800). Although commissioner Todd Nash stated that the sheriff’s funding would be used for policing of tourist-related activities, no such specific labor division is made in the wording of the ballot measure.

By statute, the money raised through tax must go to tourism-related entities and activities. Questions remain as to whether the Wallowa County Fairgrounds qualifies as a recipient, and commissioners’ plans for funding could still be legally challenged on that issue.

Wallowa County Commissioners received a petition challenging the ballot title from David Hurley, owner of Eagle Cap Chalets at Wallowa Lake Aug. 17. Benjamin Boyd of Hostetter Law Group represents Hurley.

The petition challenges the ballot title filed with the county clerk on Aug. 7, and published in the Chieftain Aug. 15.

Any elector in the county can challenge a ballot title on the basis of inaccuracy, inconcise or unfair. Hurley’s petition alleges it is inaccurate and unfair.

The petition does not challenge the process by which the measure was brought forward. Hurley is challenging the measure on issues related to the legality of disproportionately funding a county facility by placing a tax on a specific business segment instead of by a county-wide tax.

Other questions to be considered include whether any tax can be levied without first auditing operational efficiencies of the facility to be benefited, and whether a county can levy a tax on businesses that receive no benefit from the tax.

The concern over “no benefit” stems from the fact that the additional three percent tax that Enterprise and Joseph charge is used for city-specific tourism development. Enterprise, for example, receives approximately $20,000 per year, which it distributes in the form of grants in support of local events.

Currently, the unincorporated lodging businesses only benefit from advertising developed by the Chamber of Commerce — which receives 50 percent of the current county lodging tax.

Nash has argued that, as a result of Chamber of Commerce advertising strategies, unincorporated areas around the lake receive the lion’s share of tourism promotion.

Unincorporated areas are not legally entitled to an earmarked portion of the county lodging tax and cannot levy a “city” three percent tax unless they incorporate.



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