Voters to Decide on Hotel Tax Hike

The City Council has agreed to let voters decide if the council should have the power to increase the city’s transient occupancy tax.

By a vote of 4 to 1, the City Council agreed at its meeting Wednesday night to place the issue on the November general election ballot.

Voters will be asked to decide whether the council should have the power to implement, by resolution, a hotel bed tax not to exceed 12%.

The city currently collects an 8% tax on each hotel bill, less than any other city in the area, city officials said.

Surrounding cities charge 10% to 14%.

“We are losing ground, and we have to find a way to remain competitive,” Councilwoman Fran Pavley said in her attempt to convince others that the tax should be increased. “If we lose this and stay behind the curve, we’re letting the city slide.”

But Councilman Dan Kuperberg, the sole dissenter in the vote, was not easily swayed. Kuperberg said the increase could wait and that the damage to the city’s reputation would outweigh the benefits of an increase in taxes.

“I don’t want to project the image that the only solution to raising revenue for this council is taxation,” he said.

The city would each year collect an estimated $38,000 per percentage point increase, said City Manager Dave Adams.

Councilman Denis Weber and Mayor Ed Corridori both expressed concern that an increase would put the weight of the city’s financial troubles on one business, the Radisson Hotel, the city’s only hotel. But both said they voted to put it on the ballot to be “pragmatic” and give the voters a chance to decide.

Radisson officials said they would like the tax to remain the same, but they understand the need for the increase.

They expressed hope that the council would not raise the tax to more than 10%.

Corridori said he was disappointed that the crowds of people who showed up at other council meetings shouting at them about the utility users tax--which was rejected in a special election June 25--were silent on this possible tax increase.