The Baker City Council made the right choice Tuesday, Feb. 23, in deciding not to withdraw from its 2006 agreement with Baker County under which the county administers the local lodging tax.
Councilors need to gather more information before they can reasonably consider whether to make a change in how the tax is collected and spent.
Although about 73% of the taxes are collected in Baker City, the ramifications affect all of Baker County.
The lodging tax is straightforward. Guests at motels, bed and breakfasts, RV parks, vacation rental homes, campgrounds and other lodging businesses pay the tax, which is 7% of the rental rate (the businesses themselves do not pay the tax; they only add it to the rental bill). The money, except for 5% set aside for administrative costs, must be spent for tourism promotion and economic development. The basic idea is that local governments, rather than taxing local residents and businesses to promote the area to tourists, should instead tax the tourists themselves. Most cities and counties charge a lodging tax.
Locally, Baker City was the first to impose a lodging tax, in 1984. Later the county expanded the tax to unincorporated areas, and other cities, including Halfway, Sumpter and Unity, also assess the lodging tax. Since July 1, 2006, the county has been responsible for collecting the tax, including within Baker City, and for spending it. An ordinance requires that 70% be used for tourism promotion and 25% for economic development. The tax revenue, among other things, pays for the visitors center the Chamber of Commerce operates, and for the contract with tourism promoter Timothy Bishop. The county also has used the money to buy ads in travel magazines and other publications.
Councilors heard from several business owners Tuesday, including one who owns an RV park. They all told councilors that they benefit from the tax, and urged the city to continue the 2006 agreement.
That’s not to say the lodging tax system can’t be improved. County Commissioner Mark Bennett said commissioners plan to discuss the issue Wednesday, March 3. He said the City Council is a key player in the topic. Considering most of the money is collected from guests at Baker City establishments, Bennett is right. With the pandemic easing and a potentially busy tourism season ahead, city and county officials should reassess the lodging tax and consider ways to maximize its benefits in boosting the county as a tourist destination.
But until the city has a detailed plan for how it would spend lodging taxes collected within the city limits, it’s premature for the City Council to withdraw from an agreement that’s supported by the business owners who are supposed to benefit. They told councilors that the city-county joint effort works. The city needs a compelling reason to start going it alone.
— Jayson Jacoby, Baker City Herald editor