Coos County officials propose Transient Lodging Tax

by Rob Taylor, Coos County Watchdog

The past several weeks the Board of Commissioners have been reviewing the county’s budget and as expected there is a 10% shortfall of the necessary amount needed, which is the equivalent to 3.1 million dollars.

It came as no surprise, but the question remains, how does the county make up for the insufficiency?

One proposed solution comes from Commissioner Cribbins in the form of a 10% countywide transient lodging tax, or room tax on all hotels and motels, which would apply to the unincorporated areas of the county, as well as to all the cities.

Currently, there is no county lodging tax and the only cities in Coos County that do not have a Transient Tax are Coquille and Myrtle Point. Powers has no hotels or motels, so a tax is unnecessary. Cities with a room tax include, Bandon with a 6% tax, Coos Bay and North Bend at 7%, and Lakeside has the highest rate of 7.5%. Oregon has a 1% statewide room tax and that money goes to the Oregon Tourism Commission, which is a nine member board appointed by the governor to promote travel. The state tax is bundled on top of the cost of any additional local taxes, which passes onto the consumer.

The following excerpt is an explanation from the actual proposal on how the county tax would work: “If a city already has a 7% TLT, and the County TLT is 10%, we would give the city a 7% “credit” back to them so they continue to receive their 7% so it does not impact them in any way. We only collect the 3% difference. The City continues to collect their 7% just the way they always do. The County then gets the 3% up to a total of 10%. Throughout the county and across all jurisdictions the TLT tax is exactly the same at 10%. No matter where you stay inside a city or outside a city, the county tax is 10% except for the statewide 1% tax.”

Officials speculate the TLT could possibly yield 3.8 million dollars annually. After the cities take their cut of 1.1 million that will leave 2.7 million for the county. State law requires the county to spend 70% of the money on promoting tourism, which means the Board of Commissioners has to devote or give away 1.9 million of the room tax to advertising and marketing leaving the county with a measly 30%. That final tally amounts to $816,816 annually for the general fund—all of it discretionary.

Commissioner Cribbins has recommended that the Board should designate $544,544 of the 70% dedicated to promoting tourism to the Coos Bay/North Bend Visitors & Conventions Bureau. One of the partners of the VCB is Cribbin’s former employer, the Coquille Indian Tribe.

Supporters of the measure make a good point that the county is in desperate need of the money and people visiting from outside the community would pay most of this tax. Almost every destination around the country and state utilizes these types of tolls and fees to support basic services, infrastructure, and promotion costs. People expect to pay a room tax as experienced in most resorts and hotels across the nation. Coos County is missing an opportunity to generate revenue without depleting the resources of its own residents. The funding from the room tax could be available before the county signs any deals with the owners of the LNG concerning potential property taxes derived from that project.

Opponents of the tax point out that it only targets a few select businesses in the county, namely the Bandon Dunes Golf Course. Many taxpayers unfairly blame The Dunes for building in an enterprise zone where the company paid no property taxes for a decade. However, former county politicians desperate for financial success and willing to gamble with public money easily convinced The Dunes to except the tax incentives without realizing it was a superfluous offer. The deal demonstrated the folly of government sponsored economic development. Businesses should learn from the owner of the golf course and accredited him for making such a shrewd deal that only a few can relish. The officials should learn not to repeat their mistakes. Even further, they should find advertising venues to exploit the fact that Coos County does not charge people to visit us.

An additional inequity rising from a new tax is that hotels and motels owned by an Indian Tribe are exempt from paying local taxes due to their status as a sovereign nation, which gives them an unfair advantage in the marketplace against their competitors. The Mill Casino Hotel and RV Park and the new Confederated Tribe’s casino are on property held in a land trust by the Bureau of Indian Affairs. The Confederated Tribes are going to add a motel to their new casino. All of those tribal businesses are exempt from the room tax, while simultaneously benefiting from the advantage of having no property taxes to pay.

The county commissioners intend to put the Transient Lodging Tax on the ballot for the voters to decide, but the voters should consider that several locally owned motels have gone out-of-business in the area surrounding the Mill Casino since the opening of the hotel addition. The tax will also put small companies at a disadvantage to larger companies that have the ability to absorb extra charges. In addition, the commissioners could save the same $800,000 annually by simply eliminating the seven overlapping urban renewal areas that are draining money from county coffers.

The new tax may bring some temporary fiscal relief to the county’s budget in the short-term, or it may sacrifice the remaining sources of income on the altar of another tax-and-spend policy.

About the author:

Rob Taylor is a local activist and the founder of the website, www.CoosCountyWatchdog.com, which is a network of individual government watchdogs.

Resource Material:

Coos Bay/North Bend Visitors & Convention Bureau
http://www.travelportland.com/directory/coos-baynorth-bend-visitor-convention-bureau/

Oregon Adventure Coast
http://www.oregonsadventurecoast.com/

KCBY News
http://www.kcby.com/news/local/Coos-Bay-N-Bend-Visitors–Convention-Bureau-considers-makeover-282637451.html

The Oregonian online
http://www.oregonlive.com/news/oregonian/steve_duin/index.ssf/2015/03/steve_duin_coos_county_whiffs.html

The Dean Runyan Report
http://www.deanrunyan.com/doc_library/ORImp.pdf

The Mill Casino
http://www.themillcasino.com/

Travel Oregon
http://industry.traveloregon.com/content/uploads/2013/02/finaltltsurveyresults.pdf