Transient room tax stirs debate

Posted on January 9th in News

Hines Council to invite local motels into the discussion

By Samantha White
Burns Times-Herald

Due to the fact that the regularly scheduled meeting of the Hines Common Council fell on Christmas Day, the council held a special meeting the following day (Dec. 26). During the meeting, the council discussed whether it should change the percentage of its local transient room tax (TRT) and how revenue collected from the tax should be used to promote tourism in the city of Hines.

By definition of the Oregon Revised Statues, a “local transient lodging tax” is defined as “a tax imposed by a unit of local government on the sale, service or furnishing of transient lodging.” “Transient lodging” is defined by state statutes as:

• hotel, motel and inn dwelling units that are used for temporary overnight human occupancy;

• spaces used for parking recreational vehicles or erecting tents during periods of human occupancy; or

• houses, cabins, condominiums, apartment units or other dwelling units, or portions of any of these dwelling units, that are used for temporary human occupancy.

The state transient lodging tax imposes a 1 percent tax on “any consideration rendered for the sale, service or furnishing of transient lodging.” According to the law, this tax must be in addition to and not in lieu of any local transient lodging tax.

Taxes are collected by the transient lodging provider. Under Oregon law, the provider shall withhold 5 percent of the amount collected in order to receive reimbursement for the cost of collecting the tax, record keeping and reporting.

Effective July 1, 2006, Hines Ordinance 272 increased the city’s TRT percentage to 8 percent, and 25 percent of the annually budgeted revenue from the TRT is paid to the Harney County Chamber of Commerce general fund every year.

City Administrator Joan Davies explained that the motels get to keep 1 percent of the TRT, and they pay the rest of the tax to the city. Hines then pays 25 percent to the chamber to promote tourism, and any money that is left over is allocated to Hines’ city fund.

Davies said the council needs to invite the motels to discuss the city’s TRT before a decision is made regarding whether the percentage should be changed. She added that the TRT for the city of Burns is currently 9 percent.

Davies said she researched the percentages of TRT paid in Oregon cities that are similar in size to Hines and found that the percentages vary.

“There doesn’t seem to be any rhyme or reason,” she said.

She said she also researched the percentage of TRT revenue that various cities pay to their chambers.
“Some pay 100 percent, and some don’t pay anything,” she said.

During the regular meeting of the Hines Common Council that was held Dec. 11, Mayor Nikki Morgan expressed concern about what the city of Hines was getting in return for the funds it pays to the chamber.

Two of the concerns she expressed were that banners advertising the John Scharff Migratory Bird Festival were hung in Burns, but not Hines, last year, and the Cannonball Run was advertised as taking place in Burns, when it actually took place behind the Apple Peddler restaurant in Hines. Morgan and Harney County Chamber of Commerce Executive Director Jen Hoke, along with members of the council, discussed how future events should be advertised, and Morgan asked what else Hines could get, considering the city’s contribution to the chamber’s budget. At one point during the conversation, Hoke said state law requires that a percentage of revenue collected from TRT is used to promote tourism. Morgan said money used to promote tourism does not have to be paid to the chamber.

During the meeting held on Dec. 26, Morgan said it had come out that she was considering taking away all of the money that is given to the chamber. “That is not true,” she said, and she encouraged anyone who had any questions to read the notes of the previous meeting.

Morgan added that a comment was made at the last meeting (Dec. 11) that a person would like to have the cities of Burns and Hines merged. Regarding the comment, Morgan said, “It offended me that someone would make such a callous statement. The two cities have their own distinct histories. If you merge the cities, you lose the history.”

“Last meeting I brought up the flags,” Morgan added, referring to the bird festival banners. “That’s just one blooming thing. We are part of the community. Our businesses are part of the community, clear out to the Truck Stop.”

Councilor Dick Baird said, in general, the council does a good job of promoting tourism. “In order to promote [tourism], you have to advertise. That’s what the chamber does,” he said.

Morgan said that promoting tourism goes beyond advertising.

“It could be a bathroom for the park. It could be a new slide. It isn’t all just advertisement. Before you think transient room tax, you have to think what to do with it,” she said. She added that the council had the same consideration last year.

Morgan then opened the discussion for public comment.

Randy Fulton commented that Davies is a member of the chamber’s board of directors, and he asked whether there was a lack of communication between the chamber and the city of Hines.

Davies responded that there was not a lack of communication.

Regarding the bird festival banners, Jan Oswald said both the banners and the posts that they hang on were purchased by the Harney County Merchants group and local businesses.

“When we purchased [the banners], no one in Hines purchased posts. We had to raise money for the banners ourselves,” she said, explaining that the chamber did not purchase the banners or the posts.
Hoke said she found an email that she wrote to Davies in March regarding the banners. “I was trying to consider you,” she said.

Davies replied, “I asked for [the banners]. That’s why we were talking about it.”

“When we get new banners, we’ll approach you,” Oswald said. “We would love to get them up on every pole.” She added that the banners are worn-out, and new ones are needed.

Regarding the TRT percentage, Tod Gahley, who identified himself as a member of the chamber’s board of directors, said, “It makes sense to me that both communities [Burns and Hines] be the same. Travelers don’t understand why there is a 1 percent difference a quarter of a mile away.” He added that Hines is able to contribute more to the chamber because its hotels are full. He added that full hotels are a sign that the chamber does a good job of promoting tourism in Hines.

Morgan replied that it was not about getting recognition for Hines, but about Hines’ businesses. “We have a responsibility to the businesses,” she said.

Oswald said, “Every single business is invited to the merchant’s group. We encourage all to come in the entire Harney County community.” She added that Hoke attends every meeting and that business is always encouraged in Hines.

Don Munkers asked how the businesses of Hines felt about the chamber and the job being done on their behalf.

“I don’t think there has ever been an attempt to slight, overlook or ignore businesses of Hines. I speak as a representative of the government of the city of Burns and a resident of Hines,” Munkers, who is the Burns city manager, said.

Returning to the topic of the city’s TRT percentage, Baird said he would like to work it out so that the cities of Burns and Hines are the same.

However, Morgan said that it was critical to get input from the hotels before a decision was made.

Councilor Dick Anderson said, “We need to find out from Burns if they intend to go to 10 percent.”

“We need to be extremely careful how this is discussed,” Munkers said.

Morgan agreed, stating, “We need to meet with the hotels before we do anything.”

“I am warning you. This is very thin ice. You are bordering on collusion here,” Munkers said.

“OK, so we need to have a little more information then,” Morgan said, concluding the discussion.

Morgan presented Councilor Brent Drury with a certificate in recognition of his service to the city of Hines and invited him to continue to attend council meetings.
“You are a check and balance,” she said.

In other business:

• Resolution 2158 for the transfer of funds for safety equipment purchases was read into the record by Davies. The resolution was approved as read;

•Resolution 2159 for the transfer of funds from Water and Sewer Contingency to Water and Sewer Materials and Supplies to allow for unanticipated expenses was also read into the record by Davies. This resolution was also approved as read.

The next common council meeting will be held Tuesday, Jan. 8, at 6:30 p.m. at city hall.

2 Responses to “Transient room tax stirs debate”

  1. dave Says:

    really—the world is burning and this is what the leaders are doing— wow — what a joke

  2. Astrid Alexander Says:

    As a long time chamber member and having run a business in Hines I would like to add my two cents worth to the discussion. An active Chamber makes a huge difference in any community. A well run Chamber office, which Harney County has and should be proud of, is the first stop for Tourists coming into town, new residents and potential new residents. Please ask Jen to provide Statistics of Phonecalls and other contacts being made by the chamber. As a business it is really important to be proactive and assist the Chamber with its projects and promotions wether the business directly profits or not. If people stay in town and shop or visit they spend money and everybody wins. The Transient Tax is an important part of the chamber budget and should not be cut but potentially increased to ensure a healthy Chamber that can focus on promoting the Communities rather then fundraising to stay alive. GO CHAMBER I am so proud of you!!
    Hello from South Dakota

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