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Wallowa County voters will rule on lodging tax hike in November

A portion of the proceeds would be targeted for improvements at Wallowa County Fairgrounds.
Kathleen Ellyn

Wallowa County Chieftain

Published on July 3, 2018 9:01AM

Wallowa County Commissioners have voted to place a 3 percent Transient Lodging Tax increase on the November ballot. Commissioner Susan Roberts voted “nay.”

The decision was made at a special meeting June 26 at Cloverleaf Hall.

The controversial tax bump idea has undergone modification since it appeared in March. When first introduced, the idea was to raise taxes across the board for all lodging operators –– taking the totals up to 9.8 percent in the unincorporated areas around Wallowa Lake and 12.8 percent in Joseph and Enterprise.

The current countywide motel tax rate is 5 percent, plus 1.8 percent state tax and an additional 3 percent city tax in Enterprise and Joseph. Businesses at the lake pay a total of 6.8 percent but receive none of the money the state returns to the county.

The boost was offered as a way to find more money for the Sheriff’s Office and Wallowa County Fair Grounds.

Members of the lodging community reacted quickly, protesting that the bump would negatively impact their businesses and that it did not seem fair to place the burden of backfilling county budget holes on one business group.

A committee to look into the issues was suggested, including Wallowa County Commissioner Todd Nash, Sheriff Steve Rogers, David Hurley of Eagle’s View Motel, Ron Woodin of Flying Arrow Resort and Velda Bales of the fair board volunteered for that committee.

That committee never materialized.

“It was kind of a joke,” said Woodin. “At the next meeting, which was the (April) fair board meeting, we talked and that was it. Todd (Nash) just pushed the whole thing through.”

Members of the lodging community present at that April meeting reiterated their concerns and the question of the legality of using lodging taxes to improve the fairgrounds was again debated.

Oregon law allows 30 percent of the taxes collected be used to support the Sheriff’s Office. It is less clear whether the remaining 70 percent can legally be used for fairgrounds improvements and upkeep as suggested.

The “bed tax” as its often called, may be used to promote tourism for a “tourist facility” with “a substantial purpose of supporting tourism or accommodating tourist activities.” It is not clear if the Wallowa County fairground complex qualifies.

At earlier meetings, lodging businesses stated that they did not necessarily oppose some increase in the tax, but as businessmen and women, they needed to know how much money would be raised, whether the fairgrounds would qualify as a tourism facility and a preliminary plan and budget from the fair board.

None of those materialized, according to opponents.

The tax the commissioners voted on June 26 is a so-called “equalizer,” which will apply only to unincorporated areas in the county; which means, primarily, the lodging businesses at Wallowa Lake.

Proponents of the tax argued that the benefits to the county in supporting kids, raising money through livestock sales (nearly $300,000) to fatten college savings and having a low-cost facility for community use made the endeavor worthwhile. No one disagreed that a drive to raise money for the fairgrounds was worthwhile. What was at issue was whether it was fair to ask one business source to foot the entire bill and whether the scheme was legal.

Several attempts to verify claims that other counties are funding fairgrounds have been made by the Chieftain, calling county commissioners of those counties and managers of fairgrounds used as examples. In most cases, their situations were not comparable to the Wallowa County Fairgrounds.

Linn County was mentioned as an example. The county does not have a TLT tax and the Linn County Expo Center is a business facility.

“We (free) lease that facility to the fair board for two weeks,” said Linn County Commissioner John Lindsey.

Linn county has recently announced it will seek a voter-approved lodging tax.

Deschutes County Expo Center Director Dan Despotopulos confirmed that his operation received 70 percent of a 1 percent increase in lodging tax revenue collected in unincorporated areas but used it only for promotions, not for capital improvements or operational costs.

The facility draws well over a million visitors per year for events and activities.

Tillamook County Fair, another example mentioned, also used its buildings for more than the county fair. Tillamook County Fair Manager Kami Von Seggern said her county distributes $1.6 million in lodging funding grants to 22 organizations for tourism facility projects, and the fairgrounds qualifies because they hold “hundreds of events,” and are booked every weekend of the year.

They additionally meet a stiff requirement by their county that the conference center “meets the current membership criteria of the International Association of Conference Centers.”

Wallowa County could challenge the state’s definition of “tourism facility” on behalf of the fairgrounds. But that may not be the end of the story.

The Oregon Restaurant and Lodging Association and two local hotels sued the City of Bend in 2017 following a unanimous Bend City Council decision to spend $350,000 of lodging tax on road repairs. Bend lost that suit and will have to return the money and reassign it to tourism marketing.

County defends notification process

By Paul Wahl

Wallowa County Chieftain

Responding to questions regarding proper notice for two hearings by Wallowa County Commissioners on a proposal to raise transient lodging tax, the Chieftain submitted a query.

The newspaper uncovered one small notice attached to a stack of notices on a bulletin board at the courthouse. It was printed in a font small enough that one would have to remove it from the board to read it.

The Chieftain also asked why the notices for these two meetings were not processed through the email list Stacey Fregulia, the commission’s executive assistant, uses for regular commission meetings. The notice posted also advertised both meetings, rather than preparing two separate notices.

The reason for the change of the meeting venue from the courthouse to the fairgrounds was also questioned, particularly for the second session. The first included a tour of fairground facilities.

The Chieftain did not receive a response to each specific question.

Instead, county attorney Paige Sully sent a letter defending the notification procedure for these meetings.

“Wallowa County undertook several significant actions to provide notice,” she said.

• Posting notice on the Wallowa County webpage.

• Publishing three consecutive notices, May 14, May 21 and May 28, in the La Grande Observer.

• Provided notice to KWVR radio station.

• Posted at the county courthouse on the public notice board.

• Announced the date of the July 26 meeting publicly at the June 12 meeting.

“I am advised that the meeting was heavily attended ... which would indicate some level of public and media awareness of the location dates and times of the meetings,” Sully added.

Sully also said the county would continue to work to improve its communications with citizens. “We will review and consider your suggestions regarding same,” she concluded.


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