State gives power to lodging tax committee

Members of the Spokane Valley City Council didn’t react positively Tuesday to recent changes made by the state Legislature to laws governing the distribution of lodging tax money.

The change that drew most of their ire takes away the council’s power to decide how much money to give to which organizations. That authority now rests with the Lodging Tax Advisory Board. The council will have only the ability to approve or reject the board’s recommendations.

“It takes it out of the hands of the elected and puts it in the hands of the appointed,” said Councilman Arne Woodard. “I think they missed miserably with this bill.”

“If this bill was drafted to clarify, it failed badly,” said Councilman Rod Higgins. “It’s handcuffed us more than it’s helped us.”

The tax is added to hotel bills in Spokane Valley and it is distributed by the city. Every year, local agencies submit applications for funding to be used for tourism. In the past the Lodging Tax Advisory Committee made funding recommendations, but the council made the final decision. Now the law states that the committee decides what organizations to fund and how much to give them and the council can either accept or reject the panel’s decision, but not make any changes.

“City Council can only select recipients from that list and in those amounts,” said deputy city attorney Erik Lamb. “That is a significant change in terms of the role of the advisory committee.”

The committee is made up of one council member, two representatives of local hotels and two representatives of local organizations eligible to receive lodging tax funding. The members are appointed by the mayor.

The new law may deepen an ongoing controversy centered on Valleyfest. In the past two years a majority of the advisory committee recommended not funding the festival. Both times, the council added funding for the group. That would no longer be possible under the new rules.

Higgins also questioned the new application and reporting requirements. Organizations are now required to provide actual numbers for people who stayed overnight in a hotel, traveled more than 50 miles or traveled from another state or country. He asked how the city would be able to verify any numbers reported to it.

“We’re not sure how any agency is going to be able to provide those numbers,” Lamb said.

“Whether or not we like the legislation, we have to live with it,” said Councilman Chuck Hafner.

Under the new rules the advisory committee is no longer an advisory committee, Mayor Tom Towey said in an interview Monday. “It’s a controlling authority,” he said.

Towey said he worries that the change may be the first step down a slippery slope. Currently the city’s planning commission is an advisory group and the council has the power to override its recommendations. “What would happen if they had the controlling authority?” he said.

In other business Tuesday, the council agreed to some changes in street preservation projects this year. Three phases of projects are planned. The first phase, the grind and overlay of Sullivan Road, is underway. Public Works Director Eric Guth said he wanted to make changes to the third phase, which was planned to include Carnahan Road from Eighth Avenue to the city limits and Eighth from McKinnon to Fancher.

The Eighth Avenue project should be taken off the grind and overlay list, Guth said. “It has deteriorated a little bit worse than we had figured,” he said. “That’s likely going to be a reconstruction project.”

Instead Guth proposed doing a grind and overlay on Indiana Avenue from Pines Road to Mirabeau Parkway and Sprague Avenue from Park to Vista roads. The city has some street preservation money left over from last year that can be used to pay for the larger projects on Indiana and Sprague, he said.