The revenue public officials love to hate

Every year about this time, give or take, city and county officials oversee distribution of lodging tax revenue collected in their respective jurisdictions. And in every city hall or county chambers there is a greater or lesser degree of wailing and gnashing of teeth, as public officials haggle over amounts that typically make up a but fraction of their budgets.

The law allows for collection of a tax of up to 2 percent from hotels, motels and B&Bs to be poured back into the community to bring more “heads in beds.” Under state law, citizen committees recommend how the money should be distributed to applicants. Lodging tax advisory committees are made up equally of those who pay the tax and those who receive the tax.

While the process sounds logical and equitable, recommendations of the committees and subsequent discussion by city councils or boards of commissioners can all too easily come off as a popularity contest or power struggle.

In Port Orchard, for example, the council’s recent discussion of its LTAC recommendations grew heated at a meeting Sept. 18 when Councilman Jerry Childs, who chairs the council’s economic development and tourism committee, presented a significantly different set of proposed numbers from those of the lodging tax committee.

Port Orchard’s estimated lodging tax revenue for 2013 is $87,000. The council on Sept. 11 had already voted (but not unanimously) to set aside $10,000 as a reserve for yet-to-be-identified needs. Voting against the reserve were Fred Chang, the councilman who chairs the lodging tax committee in a non-voting capacity, Rob Putaansuu, who said he didn’t like the idea of a reserve for an unspecified expenditure, and Carolyn Powers, who at the meeting the following week spouted off about the tourism committee’s “wholesale” revision of the LTAC’s proposal.

We should note that among the 17 applications for the city’s lodging tax money, four were made by the city itself. The tourism committee wants to put directional signs in strategic city locations. The city’s Festival of Chimes and Lights grows bigger every year and draws people from around the region. The city contributes to holiday and Sunday foot ferry service, and there’s a need for police overtime to staff festivals.

Applicants’ requests for funding totaled $151,786, compared to $77,000 available. The lodging tax committee’s total for city-sponsored applications was $17,000. The economic development and tourism’s total was $24,400. Child’s said his committee’s recommendations were more in line with “historic” distributions. He cited the LTAC’s $16,460 allocation to the Port Orchard Bay Street Association as one that jumped out at him and fellow committee members, Cindy Lucarelli and Jim Colebank. The economic development committee recommends $6,750. And yes, Lucarelli is involved with Cedar Cove Days, another LTAC applicant.

Other applicants are community groups like Fathoms ‘O Fun, the Saints Car Club and the Sidney Museum and Arts Association. Committee members who are part of an applicant group excuse themselves during discussion of their group’s request.

“To me it warrants oversight. It warrants more than just a kick down the road,” said Childs.

Powers blasted the economic development committee for putting its two cents’ worth in before the council even had a chance to digest the LTAC proposal. She also dug in her heels over what she described as a radical departure from the LTAC figures.

“If we tweak one or two, I guess I could live with that, but I can’t live with a wholesale change of everything the LTAC committee has recommended. That just doesn’t seem right to me,” Powers said. “We have all these groups that are working their tush off, as they say, and actually do all these great things for the city, and I just can’t see us (the city) taking such a big chunk of it.”

City Attorney Greg Jacoby noted that the council’s relative interest in the LTAC process waxes and wanes. This council is particularly hands-on, he said. And, Jacoby added, council members are well within their rights under the law to be as hands-on as they see fit.

“What if each one of us brought in a whole list like this?” Powers asked.

“You could!” Jacoby replied.

“Then why even have the LTAC committee in the first place?” Powers said.

“There’s a lot of people who wish the law was written differently. That’s a good point,” Jacoby said.

Lodging Tax committee member Don Ryan, speaking after the Sept. 18 meeting, said he and his fellow LTAC members had invested considerable time in four meetings over a two-month period to study the numbers and make thoughtful recommendations. Like Powers, he took exception to the economic development committee’s rewrite proposal. Ryan, it should be noted, is president of the Port Orchard Bay Street Association.

Also at the center of the council’s debate is how much the council should lean on LTAC funds for items like police overtime that aren’t directly related to marketing the city and its attractions. A law allowing for the use of LTAC funds for operations (in addition to marketing) in festivals and special events is set to sunset in June 2013. Chang supports the sunset. Childs, Lucarelli, Powers and Putaansuu support a more flexible use of LTAC funds, so no sunset.

The council will take up lodging taxes again at its Oct. 16 work study meeting.

If you’re in the hotel-motel business, or are part of a community organization involved in promoting tourism, would you make changes to the LTAC law? What if anything can be done to make the distribution process less likely to breed resentment?

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