Electing2Blog: Legislature reforms lodging tax

By Walter Neary (reposted with permission from Electing2Blog)

Considering how often we all like to pick on the Washington State Legislature, it’s only fair to shout when the lawmakers do something very smart. And they have!

The subject in question has what at first is a sexy name: the bed tax. It’s not what you think. The subject is also called the lodging tax. The lodging tax is a fee that communities collect from people who stay overnight at hotels, motels and such.

The people who own hotels and motels don’t want the taxes paid by their customers to pay for just anything. The hotel industry, in lobbying the legislature, set things up long ago so that a committee of people outside of politicians gets to recommend how the money is spent, And the money has to be spent on promoting tourism – in other words, attracting more people who will pay the tax (with obvious benefits to the hotels, of course). The committee is of a very unusual makeup: half of the committee members have to be people who own hotels and half must represent tourism-related organizations.

I was once asked at a meeting if there was any tax that I liked.  I said yes, the lodging tax. That’s because;

• The lodging tax is collected for a specific purpose that everyone knows.
• Not only elected officials, but also a committee of local citizens get a say in how it’s spent.
• Groups must apply for the funding with specific information for which they can be held accountable.
• And it’s easy, or it should be, to figure out what exactly the lodging tax funds are spent on in any given place. Good luck figuring out what exactly your sales tax and property tax are buying, other than in general categories.

You could argue I like the tax too much and take it too seriously. This came up in Lakewood a couple of years ago, back when I was still on the council. A majority of council members decided to bypass the Lakewood committee and spend a bunch of Lakewood lodging tax for city employees who promote economic development. At the time, I thought that was the wrong thing to spend money on. I made a lot of noise about that. With classic Neary luck, I chose exactly the time to complain that the state auditor’s office was deciding to loosen up on how it interpreted the law on how lodging taxes are spent. So I looked a bit dumb, but hey, there’s no safety net in elected office.

To this day, though, I still disagree on HOW the city council spent the money. The council bypassed the advisory committee in making that decision. No one applied to the citizens’ committee. No one had to. The council just decided. I don’t like it, as you can tell from my most recent posts, when elected officials wrongly bypass citizens in conducting discussions and making decisions.

By golly, apparently the Washington Legislature agrees with me. (yes, that’s the sound of thunder in the background). The Legislature in the last session decreed that not only does a city council have to tell a committee before it spends lodging tax money, but the lodging tax committee must agree to the expenditure.The Legislature in fact specific this is the order of things: someone has to apply, and get past the citizens’ committee first.

In other words, the legislature said the citizens are as important as the elected officials. You can get more information about the law here: apps.leg.wa.gov/billinfo/summary.aspx?bill=1253

That was a great decision. Citizens matter, and they particularly matter when it comes to spending tax dollars in which they have a stake.

There are some other good changes, such as requiring people who get the money to describe just how much tourism they are generating. Again, you can read more at the link above.

I learned all this by attending the Monday night joint meeting of the Lakewood City Council and its lodging tax advisory board. The discussion was collegial, and everyone agreed to work together.Not everyone is starting off so collegially, as you can see (click here) from this example story from Spokane Valley.

“It appears your role has been enhanced,” a smiling Lakewood Mayor Don Anderson told the committee members Monday night.