With the City of La Grande contemplating a hike in the transient room tax, there’s a ripple of discontent running through the local lodging industry. The La Grande Observer reports that some of La Grande’s motel owners aren’t happy with the idea of bumping the tax by 2 percentage points.
Currently, the city charges a 5 percent room tax. On top of that, Union County charges 3 percent and the state of Oregon 1 percent. For a total tax of 9 percent. A 2 point increase in the city tax brings the total to 11 percent.
The paper reports that conventional wisdom says travelers will tolerate a total tax rate of 10 percent, but above that, they start to balk.
By law, most of the tax increase must go to tourism related activities. Even so, in a move reminiscent of Portland's diversion of sewer charges to bike riders, the City of La Grande has argued that it can divert a portion of the lodging tax to fund the city's parks.
Hotel and restaurant owners argue that higher taxes will hurt them, but provide little relief to the city's budget shortfall. “It’s not going to help the city that much and it’s not going to help us at all,” says Karl Swanson of the Royal Motor Inn.
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