City Council shifts lodging tax allocations to Spokane Valley events

Hotel taxes collected in Spokane Valley should stay in Spokane Valley, city officials decided this week.

The Spokane Valley City Council on Tuesday modified how it plans to spend the lodging tax it expects to collect next year by diverting money from regional groups like the Spokane Sports Commission to Spokane Valley organizations like Crave NW and Valleyfest.

“It’s best to spend these funds on events that actually have Spokane Valley in their name, or things that have potential to bring in tourists,” said Councilman Ed Pace.

Spokane Valley in 2003 implemented a 3.3 percent lodging tax, which is collected from hotel stays and is used to promote conventions and tourism.

The city forecasts that it will collect $572,000 from the lodging tax in 2018 for tourism-related activities.

The city’s Lodging Tax Advisory Committee approved funding recommendations on Oct. 19 that allocated $322,000 to 10 tourism-related organizations and $250,000 to the city’s 1.3 percent lodging tax fund, which is dedicated toward a large sports venue or tourism facilities that draw in overnight guests.

The Spokane Sports Commission was allocated $136,800 in the committee’s proposal. That was reduced to $80,000 by the City Council. Visit Spokane’s proposed allotment was reduced about $1,000 to $70,000.

The Lodging Tax Advisory Committee, which is composed of one council member, two representatives from businesses collecting the tax and two representatives from organizations that are authorized to receive the tax – recommends to the City Council which entities should receive funding each year.

Councilman Sam Wood at Tuesday’s study session proposed to change the advisory committee proposal to give $5,800 more to Spokane Oktoberfest, $28,000 more to Crave NW, $8,600 more to the Spokane Valley Heritage Museum and $15,600 more to Valleyfest. His plan reserves $250,000 the city could spend on park upgrades or construction that would benefit tourism.

His plan was approved 5-2. Council members Ed Pace and Caleb Collier voted no. Collier said he preferred the committee’s recommendations.

Councilwoman Pam Haley questioned how much of the lodging tax fund would go toward finishing Brown Park, because its completion is integral for bringing volleyball organizations to Spokane Valley.

Cal Clausen, who owns Spokane Valley Holiday Inn Express and Quality Inn, said two-thirds of his investment is in the city with loans on the two properties approaching $20 million.

Clausen said a volleyball court – or an event such as Valleyfest – doesn’t generate hotel stays.

“It does nothing to promote tourism,” he said. “I request that council follow your committee’s recommendation for allocation.”

Councilman Arne Woodard said he’d like to see lodging taxes fund a capital project such as multipurpose fields for high school play and tournaments, which is the purpose of the lodging tax fund.

“It’s always been a concern that whatever we build has to be available to the public and has to be available to our schools,” he said.

Councilman Sam Woods, who leads the advisory committee, said there was a lot of due diligence in deciding which organizations would receive grant funding.

Woods said he understands there were complaints about the selection process, which he took into consideration.

“I was pretty upset because that LTAC committee worked pretty hard, and I got a lot of respect for the members on that committee,” he said. “But, after seeing and hearing testimony, and thinking about it … I always felt that we needed to give more to the local economy on the LTAC committee when I sat on it.”

The grant recommendations from the City Council will be presented to the advisory committee within 45 days.