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The Spokesman-Review Newspaper
Spokane, Washington  Est. May 19, 1883

Tourism industry wrong tax target

The Spokesman-Review

You can make all the cracks you want about the wages paid by the hospitality industry, but there’s no question that Coeur d’Alene, Post Falls and Kootenai County have survived the economic downturns of the last 15 years by embracing tourism.

While the natural resource industries that built Spokane and North Idaho continue to struggle, the tourism industry launched by Bob Templin and expanded by Duane Hagadone and Jerry Jaeger of Hagadone Hospitality has provided a buffer for hard times. High school graduates have earned their first regular paychecks making beds, bussing tables and parking cars at the Coeur d’Alene Resort. Others have made ends meet with second, summer or part-time jobs in the North Idaho industry promoted almost single-handedly by Hagadone from the mid-1980s into the 1990s.

Although the tourism industry appears to be on solid footing in North Idaho, elected officials should be cautious not to abuse it in their never-ending quest to find additional tax revenue. A local bed tax, as is now being considered by the two Kootenai County cities, could do that, if it’s imposed for the wrong reasons. Such a tax should be used for facilities or a cause that directly benefits the hospitality industry more than the community at large. The bed tax being mentioned by Coeur d’Alene and Post Falls would go for parks, police protection, pedestrian paths and other amenities. This approach should be reconsidered.

Coeur d’Alene Mayor Sandi Bloem and Post Falls Mayor Clay Larkin deserve credit for seeking ways to lessen the property tax burden on their constituents. In targeting the hospitality industry in the form of a bed tax, however, they may be in danger of hurting the golden goose that plugged the economic hole during lean years while Kootenai County was aggressively courting out-of-state businesses and diversifying in preparation for a new millennium.

Rather than hamstring the tourism industry to build and maintain city parks, bike paths and trails, they should follow the example set by Spokane, where the city’s hotel/motel tax is used to fund expansion of the Spokane Arena and Convention Center, which attracts numerous visitors as well as locals every year.

In arguing against a bed tax, Hagadone Hospitality official Jerry Jaeger made a good point that city officials should target all businesses rather than just the hospitality industry if they need more revenue for services. However, as a better option, he suggested that they lobby the Legislature to expand the local-option sales tax to cover capital expenditures and other projects. Currently, the half-cent local sales tax can be used only for jail expansions.

“It’s curious to us that Coeur d’Alene would want to penalize our hospitality industry,” Jaeger said in a Spokesman-Review story.

It’s doubtful that progressive mayors such as Bloem and Larkin would intentionally do anything that would harm North Idaho’s economic engine. But they should be cautious as they continue to flirt with a possible bed tax.