Town could eliminate hotel tax committee

La Conner Town Council will consider adopting an ordinance that would disband the town’s Lodging Tax Advisory Committee.

The town established the advisory committee in 2009 to study and make recommendations on how the “bed tax” collected from overnight visitors in the local hotels and inns is spent. By law, the money is to go for things that accommodate activities for tourists or attract tourists to the area.

But the state law governing the committee role was changed a few years ago, making it impossible for the Town Council to adjust the amounts allocated to the various groups that receive lodging tax grants. The council, which sets the town’s total budget, can either accept the committee’s recommendation or reject it and send it back to the committee for another recommendation. That arrangement has left the town’s taxpayers on the hook for some amenities that are mainly for tourists – like public restroom supplies.

Legally, La Conner, with a population of around 900, is exempt from the state requirement to have a Lodging Tax Advisory Committee. Only municipalities with populations of 5,000 or more must have one.

Town staff and the finance committee in 2013 recommended that the lodging tax committee be abolished so that the grant process could to back to the way it used to be – with groups applying for money directly to the town with the council having the final say on who gets funded.

But there was strong objection from grant recipients – some of whom were on the committee – and the council voted to retain it.

This year based on the committee decision from last fall, the town will allocate $123,000 in lodging tax funds. Of that money $53,000 will go to make the final bond payments on the town’s visitor parking lot and for the construction of Maple Hall. Both were constructed with a promise to the approximately 450 taxpayers in the town limits that lodging tax would pay a portion of those loans.

That promise wasn’t always kept. For a few years, most recently in 2012, the town council accepted the committee recommendation that none of the lodging tax would go to the bonds. That year the Chamber of Commerce received $75,000 of the $97,000 that came in.

Since 2014, the committee has trimmed the chamber’s share – this year $49,000 is allocated to the business organization. The Tulip Festival and local museums and other cultural organizations are scheduled to receive small grants and the town will spend $14,000 on the public restrooms on Morris Street and First Street.

Local taxpayers are still on the hook for most of the restroom cost – which approaches $40,000 per year for supplies, cleaning and maintenance.

Each fall, usually in October, the lodging tax for the following year is estimated and allocated to the various grant recipients who submit applications around August. Should the Town Council vote to abolish the Lodging Tax Advisory Committee, screening applications and deciding where the funds go in 2018 will be entirely up to the council members.

At the council meeting last week attended by council members John Leaver, Bill Stokes, Marylee Chamberlain and Bill Bruch, there was unanimous consensus to revisit the lodging tax committee issue. Councilman Jacques Brunisholz was not present.