Restaurant-lodging group presses Bend room-tax suit

The Oregon Restaurant & Lodging Association said it filed a motion for summary judgment last Thursday in a lawsuit filed last fall against the city of Bend, accusing it of diverting the city’s room tax revenues away from tourism promotion and reducing the allocation for tourism promotion below what is required by law. The question presented in the case is whether the city violated state law in May of last year when the Bend City Council passed Ordinance NS-2291. The ordinance reduces the percentage of total local transient lodging tax revenues the city spends to fund tourism promotion or tourism-related facilities after July 2, 2003. “Bend made a clear commitment in 2001, ratified in city code, to increase the percentage of total local transient lodging tax revenues to be spent on tourism through a phased-in approach,” said ORLA President & CEO Jason Brandt. “We believe state law requires the City of Bend to uphold this commitment.” Bend City Ordinance NS-2291 violates state law (Oregon Revised Statue 320.350) as follows: 9% of the City’s 10.4% city room tax rate has a set of restrictions for appropriate use of those funds. Within the 9% city room tax rate, the City is statutorily required to spend 30 percent on tourism promotion and tourism-related facilities based on their commitment ratified in city code back in 2001 before 2003 state law was put in place. The remaining 1.4% city room tax rate is subject to a statutorily required 70% investment in tourism promotion and tourism-related facilities. Bend voters increased the lodging tax rate in the November 2013 general election. Revenues from this increase adhere to separate spending restrictions. “We look forward to resolving this matter through the court system. It is our duty to protect and promote the importance of tourism investments as an economic driver for communities across Oregon,” said Brandt. The association noted a report from Longwoods International shows that for every $1 invested in tourism promotion, $237 is generated in economic impact and $11 in tax revenue to the benefit of Oregon residents. ORLA said it is engaged on a state and local level, helping local municipalities realize that shifts in tourism promotion investments can do more harm than good. Brandt argues there is a direct correlation between tourism promotion and a community’s own tax revenue. “Tourism promotion dollars are crucial to keeping Oregon’s visitor destinations top of mind. Local communities stand to lose significant tax dollars for their general funds if tourists choose to travel elsewhere.” For the city’s response to the initial lawsuit filing, and a link to the lawsuit, see the ‘related story’ beside this article.