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City of Bend Sued by Hospitality Group

BEND, OR -- A state-wide hospitality association has filed suit against the City of Bend alleging the City spent money earmarked for tourism promotion on other budget items.


President and CEO of Oregon Restaurant and Lodging Association, Jason Brandt, says that before 2013, 70% of the 9% room tax could be spent at the City's discretion, but 30% was to be set aside for tourism promotions. Then, voters passed a measure raising the room tax from 9% to 10.4% percent, with the additional 1.4% percent earmarked in exactly the opposite way, requiring 70% to go to promotions.
Brandt says he understands that governments have a lot to cover, but that can't excuse reallocating specified funds. "We do feel for governments, and we want to make sure we are a good partner. Having said that, we have a responsibility as an association, to make sure we have the backs of the industry."
The City of Bend passed an ordinance this last May changing the allocation percentage to be the same for the entire 10.4% room tax, which is why the ORLA has filed the lawsuit, as the City seems to believe their threshold is 30% of the total room tax, without the distinctions voted into law in 2013. "Moving forward with this has more to do with making sure that we're sending a clear message that certainly they're having challenges making sure their budgets are balanced, and we're just trying to make sure that everyone understands that the lodging tax revenue, the portion of it that is restricted, is not an appropriate place to look to solve budget woes that are impacting communities right now."
The City of Bend issued a statement regarding the suit, disagreeing with ORLA's characterization of how the tax is supposed to be disbursed, so Brandt believes the City was probably attempting to make up for budget shortfalls, but he says they can't rob Peter to pay Paul. "When tourism does great, that pot of money continues to go up and up, providing jobs and great opportunities for employment for people in the region. We're big fans of the power of tourism. It's something that I think Oregon is doing right, and we want to make sure we keep on doing it right."
In round numbers, Brandt says the approximate amount of money brought in through that room tax is $10 million, of which the City of Bend can spend $6.5 million on anything it chooses, with the remaining $3.5 million going solely to promotion.


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