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SAN JUAN COUNTY HOTEL/MOTEL TAX |
A Tourism Master Plan might help committee decide how to spend $8 million during next decadeThe San Juan County Lodging Tax Advisory Committee is struggling to figure out how to distribute funds from the first 2 percent lodging tax collected at lodging facilities in the county. The county ordinance separates the 4 percent lodging tax into two separate pots of money- one for promotion and one for facilities. The state law which regulates how the funds are distributed does not make such a distinction. The committee expects to receive applications which blur the line and wants to finalize the way the Request for Proposals which are due on April 10, 2008 will be judged. Another twist is in the past a formula was used which designated set percentages of the fund to the historical museums, the community theaters and the Fair. During the LTAC meeting last week, the need for "weaning some of the groups off" of the funding source was discussed. This round of RFPs may be seen as a "transistional year, " several committee members said. Ron Henrickson, director of Community Development and Planning presented an outline of how the committee may want to develop a Tourism Master Plan over the course of the next year. "Your mission is to provide funding dollars to promote tourism for the biggest return on investment. Look at it as a business, you'd have to have a master plan, a vision of where you want to be in ten years. You have $8 million to invest in 10 years. What kind of change do you want to bring about? What kind of product can I maximize over that 10 year period?"Henrickson explained there several common elements to the master plans.
The LTAC will discuss the pros and cons of developing a Tourism Master Plan at a future meeting. Henrickson suggested they would probably want to consider hiring a consultant who "could work with you over a period of time. It may take up to a year. Then the public will know what this committee is doing, what you will achieve, how you will get there, and how you will measure it." Visitors Bureau's tourism promotion contract renewed by county Councilposted 07/23/2007
The contract will specify that 5 percent of the money should be spent on "innovative promotions." Among the new programs promised by the Visitors Bureau are: "Two Nation Vacation", partnering with Sidney, Victoria and Vancouver Island; "Girlfriends Getaways", to capture the attention of the growing number of women traveling in groups; and a "Bring Your Meeting to the Islands" campaign, targeting corporate, government and organization meetings and retreats on the island. Other proposals seeking portions of the tax revenue for specific projects included the Whale Museum, the Westcott Bay Institute, and the NW Workforce Development Council. However, the Council accepted the recommendation of the Lodging Tax Advisory Committee to continue to contract with a single entity for overall promotion, rather than fund individual projects. The promotional fund represents half of the County’s 4 percent lodging tax. The balance is used for developing and maintaining facilities and infrastructure that attract and service visitors. Last year the promotional portion of the tax produced $373,813; however, as part of the County’s previous contracts with the San Juan Visitors Bureau, the contract amount was pegged at $350,000 for the past two years. This year the contract amount will be allowed to grow with the increase in tax revenue; however, a portion of the increase may be used to establish a reserve fund. In past years the fund has had to borrow from other County funds to pay for advertising that must be purchased before tax revenue is received. The special 2 percent lodging tax for promotion was enacted in 2002.STORIES FROM 2001-2002New 2 percent lodging tax in effect Oct. 1,2002posted 08/14/02 Commissioner Rhea Miller opposed the tax increase calling it one of the worst decisions in the past eight years. "This is a major history change. This action is attempting to fix a non-existing problem and exacerbates existing problems," she said. Overloaded ferries were one of the problems she believes will worsen with more promotion. "People are still coming, they are just spending less," she said. "San Juan County is changing direction. It is becoming a tourism promotion enterprise." Commissioners Darcie Nielsen and John Evans disagreed with Miller's assessment. Nielsen said, "This will give the county a say in the kind of tourism we want in this county." Evans believes using the estimated $350,000 per year for promotion will help strengthen the economy and provide a better opportunity for year-round jobs. Hotel/motel tax needs more workposted 07/26/02
Commissioners sent the ordinance which would impose the hotel/motel tax increase back to county Prosecutor Randy Gaylord for more work on July 23, 2002. Commissioner Darcie Nielsen preferred two separate ordinances, one for the new tax and one for the old tax. Gaylord suggested one ordinance was appropriate and that the description of the ways the funds would be disbursed belonged in a resolution. The BOCC will discuss the matter again at 9:30 a.m. Tuesday, July 30, 2002. Hotel/motel tax increase approvedposted 06/19/02
The BOCC approved the recommendations of the Lodging Tax Advisory Committee with one exception. A request to require a $20 license/permit for transient lodging accommodations was dropped. LTAC Chair and County Auditor Si Stephens said, "This would allow us to identify them and include them in promotion publications." It would also be a means to help the county determine if hotel/motel tax was being collected. Commissioners John Evans and Darcie Nielsen objected to the permit/license. Evans said, "The cost of administering the license would be more than the money we would collect. We would be treating one class of business differently from other businesses. Commissioner Rhea Miller favored the license/permit. Having a permit system would give the county a means of enforcement. "The permit could be yanked," she said. " I thought the whole issue behind the $20 is so people would start reporting. " Nielsen made a motion to adopt the additional 2 percent hotel/motel tax. Evans added a friendly amendment saying the money would be used solely for tourism. They both voted for the measure. Miller voted against the motion "This represents a 180 degree turn on how to spend money. We are going from that to actively spending $350,000 to solve a problem it won't solve," she said. "I don't want to be a commissioner that has that legacy. I don't want to exacerbate the existing problem. I cannot support this." The county Prosecutor will draft the ordinance which will be then be signed by the commissioners. Evans said, "The next step is to appoint the members and to give them their marching orders." ViS wants hotel/motel
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posted 06/01/02
The request from the VIS board was made during the BOCC's public hearing on the Lodging Tax Advisory Committee's proposal to double the current hotel/motel tax. Smith was a member of the committee and said the request to have the county Auditor monitor transient rentals was left out. Susan Fletcher of VIS said, "We want this considered no matter what happens (to the proposal to increase the tax.) County businesses collect sales tax on goods and services. The state sends back to the county two of the 7.7 percent sales tax collected on transient rentals. If lodging facilities do not file their tax forms as transient rental facilities the county does not receive the two percent money. VIS argues more money could be collected if the county made sure the businesses were reporting correctly. In their memo to the board they listed five objectives that would be accomplished by requiring a license/permit.
Comments made about LTAC proposalposted 06/01/02
"you will lose my vote if you do that,"he said. " if you don't keep this clean." The proposal calls for half of the four percent tax to be used for promotion. The other half goes to county parks, the fair and a variety of museums and theaters. Commissioner Rhea Miller is opposed to the tax increase. She has said the general public has not been informed of the proposal. During the formation of the LTAC, county Auditor and Committee Chair Si Stephens said he planned to hold public meetings on the three main islands. At the May 21 hearing, Miller asked Stephens if the meetings had been held. He said, " I wished we could have, the 45 day time line did not allow us to do that." The nineteen-member committee met in four full meetings and 3 subsidiary meetings during the 45 day period. Stephens praised the committee members and Debbie Emery (who compiled the results) for their outstanding work. The committee constructed a mission statement and recommended the formation of a 501 (c) 6 corporation. Details of the proposal are posted here. Sample of public comment at the May 21 hearing:MICHAEL RIVKIN:(LTAC member) You have (heard from the people) we are the people. We do represent small businesses and lodging. That does not imply it was an unanimous voice...But to state that it has not been put up for public opinion is an error. MARGARET JONAS: I represent the voice of the people who come to rent... If you keep adding more tax on, it hurts the tourism here...The islands speak for themselves, I think this is really unnecessary. ROBERT HERRUP: I am worried about tourism. I ask you to consider, how much is enough. Governance is a philosophical issue. Everyone has own perception of how much is enough...San Juan County has as much need to advertise for more tourists as Hanford has to advertise for radioactive waste...More tourism equals greater degradation...You are killing the goose that lays the golden egg. There is a difference between fouling your own nest or the community nest. DAVID BAYLEY: (President of San Juan Community Theater Board) The perception that only a few benefit from tourism is a totally inaccurate statement. We get $23,000 from hotel/motel mony and receive $27,000 in business sponsorships. If we didn't have a healthy economy we couldn't do that. There is an incredible multiplier effect from tourist dollars. FARHAD GHATAN (LTAC member)(President of San Juan Island Chamber of Commerce): It seems to me the issue at hand is whether or not we have faith in this organization to do what is sets out to do. We should be able to work through any concerns about degradation of lifestyles. I am very disappointed in the last 45 days we didn't have comments. It was incumbent on the people with concerns to engage the people who are working on it. We were not engaged by people who had concerns early on...We've been hurt very badly by Sept. 11, and by perception we are not open to this kind of economy. if we just let economy evolve as it would, it'll push have-nots down further. CHRISTINA TAYLOR:(LTAC member) I have a B&B on San Juan Island. I've worked here for three years and employ three people. ...We are not the bad guys in all of this. We may not be wealthy enough not to work. We can live in the communnity by virtue of the fact we do operate B&B. JACK CORY:How do you promote tourism for the off peak season without promoting tourism in the peak season? I do think this is a silly idea, a selfish idea, that all of us will pay the hidden costs of. It is important to know all the effects on the county and not just the tourism industry. JERRY RASMUSSEN: (read a letter from his wife Patty Rasmussen) Several people said tax will not make a difference. It will make a difference to some. The industry is not unanimous on this issue. I don't believe there is even a consensus. One item I looked for was a benefit cost analysis. BILL WRIGHT: I like to think I have a wonderful and admirable business. I really market smiles. There are misconceptions about the word sustainable. It is not killing the golden goose. We all understand that. We have to make a living. There are certain economic realities we have to deal with... This is a free enterprise system. We have the opportunity to have the golden goose here forever. HELEN KING:I own Highland Inn B&B. I represent 26 B&Bs on San Juan Island. The majority were in support of this 2 percent tax. I think the negative response was because people did not know what this was about. Responsible commissioners will realize how this tax will help the economy. There will be a tremendous trickle effect. CARL SILVERNAIL: I caution you about transient accommodation (permit/license). It would be double dipping. More than two units in a facility requires a fee (by the state). I do believe that kind of enforcement activity is essential. I haven't been here all that long. When I came here, the word promotion was taboo. I have mixed emotions, but the big step forward has gotten a lot of the business community together...It looks like if we implement the tax, we'll see about a 20 percent increase in revenue. SUSAN FLETCHER: (VIS) Instead of instituting additional tax, take time and revisit formula for the current tax. I don't think it is fairly allocated between those who provide and those you receive. Before we go ahead in this economic time, revisit what we already have. SANDY PLAYA: I own a B&B. and a kayak business. I don't think we have the structure set up. We have lots and lots of lodging facilities that don't pay it. Three people on Orcas have told me they are finishing up their garage as an apartment (to rent out to tourists). There is no way to tell, but as a wild guess it is 50 percent on Orcas island...We could make another $325,000 (by collecting from existing tourism). We're putting the carts before the horse. |
List of Transient Rental Income Businesses in
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JIM NELSON: LTAC invited John Cooper from Whatcom Cty bureau. If you look at communities like ours, it is very unusual to not have a visitors bureau. we would stand out in sense we don't have organized corporate operated visitors bureau. The mentality behind it is an investment mentality....This will be a focal point for small business people on the islands. A chance to meet people from each of the islands, to develop a cohesive strategy. ...If we aren't going to embrace this idea for a biz already well established. when we have periods of underutilized facilities. There is talk of high tech. Why would we do for a new realm we are not invested in We ought to be first looking at businesses that are already here. Try to make these more effective. ALAN PASCAL: People are competing with each other for the same piece of the pie. We need to put together a brand that works for San Juan, a logo, components that we can push through our efforts. ...I have never heard tourists related to radio active waste. MIKE STOLMEIER:We are a hospitable group of people. We are all intelligent people. We have a good group of people to carry forward with this type of program. We no longer tolerate racial discrimination. But we still do it by place of origin. Because someone is not from San Juan County. I see people discriminating from people by place of origin. I'd like to see that not tolerated anymore. ARNE KLAUSS: I have guarded support for this tax. ..Spirit of legislation focuses on making sure there is money for heritage, arts and culture and people who craft that... I want to emphasize I do believe it requires a public process. You are asking a public entity to participate in something they (businesses) could do themselves...This impacts jobs and housing to positive and negative benefits... People come to the islands for a certain sacred experience. WARREN MILLER: I've been in the resort business since 1946. (Referring to the graph someone put up illustrating the peak tourist season) You turn the bell curve upside down and you have a ski resort. I was born in LA and watched it go into the toilet, moved to Seattle watched it march in> I tell friends it rains all the time. In the down time, one hotel is 100 percent full others are vacant, depends on individual owner - networking, better service. .. I have never seen a tax taken off. STEVEN FETTERS:(Inns at Friday Harbor) I've been here three months. I've been in the business for 25 years. The phones are not ringing, reservations are not coming in. Allocate money throughout the whole season, develop a good base of repeat business. I have never had a person inquire about taxes when making a reservation. MICHAEL RIVKIN: Boiled down, this proposal is a quality of life issue. Tourism supported many of the amenities. LTAC was committed to preserving these assets. The LTAC took responsibility very seriously. Parks to benefit if hotel/motel tax increasedposted 02/07/02
Commissioner Rhea Miller advised against increasing the tax. She was concerned the public had not been informed and cited state reports on the economy. "The economy is poor," she said. "No amount of advertising is going to change that. Adding 2 percent could aggravate the situation." She noted the increase in the number of lodging facilities. She asked, " Is the problem there are too many pieces of the pie?" Commissioner Darcie Nielsen proposed reconfiguring the allocations of the current tax. She wants the 30 percent which now goes to the county Visitor Information Service (VIS), special projects and into a reserve fund to be given instead to county Parks for capital needs. Under her proposal, the VIS would be funded out of the new 2 percent tax. She suggested the county Economic Development Council could oversee a tourism promotion campaign. Currently the county's EDC is part of Island County's EDC program. In order to impose the tax increase, the BOCC must appoint a Lodging Tax Advisory Committee (LATC). The BOCC would then present a proposal to the committee which would then have 45 days to study it. The LATC would hold at least one public hearing during the 45 days. The committee would present its recommendations to the BOCC. Representatives of the Orcas Island and San Juan Island Chambers of Commerce and the county-wide Business Association of San Juan County spoke in favor of the tax increase. They presented a list of potential members for the LATC which is required under state regulations. Mike Stohlmeier of the BASJC suggested a 12-member committee consisting of an elected official (most likely the auditor), five people from the lodging industry, representatives from Lopez, Orcas and San Juan Island Chambers of Commerce and the BASJC, one person from the VIS, one person from the EDC and one person from the Town of Friday Harbor's LATC. The representatives from the town and the EDC would be non-voting members. There is a five-member LATC now. County Prosecutor Randy Gaylord told the BOCC they have a range of options regarding the committee. They can disband, expand, or replace the committee. County Auditor Si Stephens said the state requires an equal number representing those who are collecting the tax and those who are receiving funds from the tax. The compostion of the LATC will be discussed at the Feb. 12, 2002 meeting. The role VIS would play if the tax was imposed was another topic of discussion. All three commissioners praised the work of the VIS. Evans considers it very important and wants to make sure in doesn't get lost in the restructuring process. "The key aspect is the type of information about the culture and ambiance VIS provides," he said. "It is a large measure of why people want to come here." Miller praised the VIS activities. "I support it 100 percent. Their production is the best I've seen of any. It tries to give everybody an equal opportunity." Nielsen wants to see the role of VIS continued but thinks there are efficiencies to be gained. The composition of the LATC and a BOCC proposal to be given to the LATC will be discussed from 2:30 to 3 p.m. Tuesday, Feb. 12, 2002 in the county Courthouse. Additional hotel/motel tax discussed todayposted 02/05/02
Commissioner Darcie Nielsen favors imposing an additional 2 percent tax. Her proposal suggests changing the way the current 2 percent tax is allocated. The county uses the following formula:
Nielsen suggests giving the 30 percent allocated to VIS, Reserve and Special Projects Funds to the county Parks capital facilities fund. Under her proposal, the VIS and tourism promotion would be funded out of the new 2 percent. An expanded Lodging Tax Advisory Committee would provide oversight and the county Economic Development Council would carry out the promotion program if her plan was adopted by the BOCC. More money for tourism promotion requestedBy Sharon Kivisto posted 12/11/01
The county collects approximately $350,000 annually in hotel/motel tax. The funds are distributed to performing arts facilities, the county fair, the VIS, special projects and into a reserve fund. Twenty-two percent is divided equally among Orcas Center, Lopez Community Arts Center and San Juan Community Theatre. Lopez, Orcas and San Juan Island historical museums divide up 18 percent. Thirty percent goes to the county fair/multi-purpose facilities. Twenty percent is allocated for the VIS. Five percent goes into a special projects fund and five percent goes into a reserve fund. In a letter dated Nov. 7, 2001, VIS manager Becky Smith and VIS Board President Susan Fletcher asked the BOCC to reconsider the allocations. They believe the money should be used for promotion of tourism. They suggest the commissioners wean the musuems, fair and theatres off of the funding source over a five-year period. Increasing the hotel/motel tax another 2 percent was discussed at a Nov. 7, 2001 meeting in Rosario Resort sponsored by the Business Association of San Juan County (BASJC). Owners and operators of B&Bs, whale watch charters, gift shops, airlines were among the attendees. County Commissioner John Evans and Town Councilmember Bill LaPorte also attended. At the meeting, Smith said, "I can tell you the museums and parks will be there in force and will stand up and say give nothing for VIS, nothing for tourism. If they hear another 2 percent is being collected, they'll be there." Commissioner John Evans favored an increase of 2 percent. "Two percent more on someone's bill won't make a difference if someone stays or not," he said. He believes using the revenue for promotion of tourism would make a difference to county businesses. B& operator Mike Stolmeier told the group he is putting together a panel to review the options available to increase tourism. "We've got a high quality product -- a night in the San Juans," he said. "We don't need to construct anything. I'd much rather pay wages and benefits than unemployment." The BASJC along with the Orcas Island and San Juan Island Chambers of Commerce passed a resolution asking:
The BOCC has not yet acted on the requests. |
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County allocation of Hotel/motel tax revenueSan Juan County Commissioners allocate the hotel/motel money using a formula which was last updated in Dec. 1999. The tax revenue generated from the 2 percent tax on lodging facilities is distributed as follows:
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Letter from VIS manager and board presidentDated: 11/07/01 In a recent meeting, the Board of Commissioners asked the Visitor Information Service and other representatives of the hospitality industry in San Juan County for suggestions on how to strengthen the industry and thereby bolster lagging county revenues. The "workshop" design did not seem conducive to successful accomplishment of this goal, and indeed few concrete suggestions crossed the bar from the citizenry to the Board. We hope in this letter to set forth more clearly the position of the VIS and the feelings of the innkeepers with whom we have spoken. In its original charter provided by (by the Board of County Commissioners?), the VIS was established
We believe that the time has come to abandon this policy as counter to the best interests of this county's economy and the legislative intent of the statute establishing the 2 percent hotel/motel tax. As we understand the present law, the revenue from the lodging tax or hotel/motel tax must be placed in a special fund and used solely for tourism promotion, the acquisition of tourism-related facilities, or the operation of tourism-related facilities. (See RCW.67.28.1815). While other counties and municipalities are using these funds to promote tourism in their areas, San Juan County appears to have steadfastly declined to do so. Such a policy may have been acceptable when tourism was doing well, but seems untenable in the present economic times. We believe that this county has funds specifically intended to promote tourism, yet declines to use those funds to promote an industry which is a principal employer in the county and a major source of sales tax revenue. We urge the County to change the charter of the VIS and instruct it to expend the funds available in "tourism promotion" as defined in RCW.67.28.080. The Visitior Information Service and the county's lodging industry as a whole recognizes that other facilities and agencies have become accustomed to receiving the majority of the 2 percent hotel/motel tax revenues. It would invite public displeasure to suddenly cut off funding to these agencies, even though they may be only tangentially related to tourism. We suggest, instead, that this County institute a five-year plan to wean these agencies off hotel/motel funding and gradually redirect these revenues to the purpose for which the legislature intended them. In summary, then, the Board of Directors of the San Juan Islands Visitor Information Service urges the Commissioners to take two major actions:
We believe these actions will promote an industry vital to the economic interests of the citizens and government of San Juan County, and thereby increase sales tax revenues for the general purposes of the county. |
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SAN JUAN ISLANDER © 2008 |
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