Business owners expressed opposition Wednesday to a lodging tax that would help pay for personnel costs at a new jail in Warrenton.
Clatsop County commissioners held the first public hearing on the 1 percent tax that would help cover costs such as additional deputies, a nurse and mental health experts. A $20 million bond to remodel the former North Coast Youth Correctional Facility into an expanded jail will be on the November ballot.
The tax would create $1.4 million annually in revenue for the county and cities, according to county estimates. State law requires that 70 percent of the revenue — $980,000 a year — from the new tax be spent on tourism promotion, leaving 30 percent — $420,000 — for jail operations.
The portion of revenue collected from businesses within city limits would be returned to cities. How those cities would choose to use that money to promote tourism would be up to each city, County Manager Cameron Moore said.
The tax would be in addition to a 9.5 percent lodging tax the county already imposes in unincorporated areas, as well as other lodging taxes set by the state and cities.
Due to overcrowding, several inmates at the county jail in Astoria are released each week without posting bail while awaiting trial. If the November bond is approved by voters, the county jail would be relocated from Duane Street, with a capacity of 60 inmates, to the Warrenton facility, which would hold 148 inmates with room for expansion. Annual jail operating costs — $3.4 million this year — are estimated to rise by more than $1.2 million if the jail is relocated.
The rationale for the tax is that people who live outside the county comprise an unusually large number of inmates at the jail — an estimated 27 percent — and should help alleviate expenses.
Local lodging operators on Wednesday suggested the 27 percent figure may be skewed since not everyone arrested from outside the county stays in hotels. Sheriff Tom Bergin, however, said a number of people who are arrested for drunken driving and drug-related activity rent hotel rooms during visits.
In written testimony, Jason Brandt, the CEO of the Oregon Restaurant & Lodging Association, asked commissioners to delay a decision to give county officials time to consult the association, chambers of commerce and other tourism-based businesses.
“If an industry tax increase is of interest to lodging operators, the meetings could help serve as a helpful catalyst in identifying strategic tourism investments that could result in more tourism tax revenue and thus more unrestricted dollars for investments in jail operations,” Brandt wrote.
The local business owners mirrored that request. A number of them also lamented what they described as a tendency for local governments to use the 30 percent of revenue from lodging taxes for projects at the expense of the tourism industry.
“I’m opposed to the tax because taxing authorities seem to come to the hotels for money because they see it as an easy way. The people who are taxed don’t really have a say,” said Don West, general manager of the Cannery Pier Hotel and owner of the Astoria Crest Motel.
Bergin said the lodging tax would add $1 to a $100 room rental. “If we were at 3 or 4 percent asking, I could understand that, but that’s why we said 1 percent, you know, is more than fair,” Bergin said. “It’s kind of this, you know, this hypersensitivity to additional tax.”
While some conceded the proposed tax was not large, lodging operators said other tax hikes — including one passed by the Astoria City Council last year to help fund city parks — are adding up.
“That extra 1 percent isn’t going to make much of a difference for us, but it’s just sad that this is pretty much the only place you guys always turn to,” said Robert Jacob, owner of the Cannery Pier Hotel.
Business owners were skeptical about precisely how the 70 percent of revenue would be used for tourism promotion, a distrust that has caused tension throughout the state. The lodging association, for example, won a Deschutes County lawsuit in May in which it claimed Bend used money for road repairs rather than tourism. The city is appealing.
Commissioners will hold a second hearing — during which they may debate and vote on the new tax — later this month. The tax would take effect in January if passed.
Commissioners would have the option of withdrawing the tax if voters do not approve the November bond. While Bergin said he would prefer to keep the tax in place even if the bond doesn’t pass, business owners asked that it be repealed.
Looking out at the audience at one point in the meeting, the sheriff jokingly offered one concession to those unhappy about the potential tax: “Just so you know, I’ll be in the dunk tank Friday at the (Clatsop County) Fair.”