CITY SHOULD NOT CUT DEVELOPMENT FUND

May 20, 2002 12:00 am

What a mess La Grande's city manager found himself in during the recent city budget committee hearings. The manager, Wes Hare, presented the committee with a proposal to create a new franchise fee on water that would have generated $160,000 for the city during the coming year.

The manager's proposal caught a number of budget committee members off guard as to why the tax was needed. Unfortunately, Hare wasn't able to convince the committee of the need, so the franchise fee proposal was cut out of the document that goes to the city council for approval.

In order to balance the perceived shortfall in the budget, $75,000 was removed from the emerging economic development fund.

So where do these funds come from and what have those funds been used for in the past? The $75,000 is money that comes from the city's portion of the motel tax that is collected jointly by the city and Union County

Recently the city has collected around $180,000 each year. A small amount stays with the city for administrating the tax and the rest is given to the La Grande-Union County Visitors and Convention Bureau and the Blue Mountain Conference Center (at the Armory). The $75,000 was portioned out last year as follows: $17,500 for Union County Economic Development Corp. operations; $40,000 to Good Things (a downtown business) as a grant toward remodeling and expanding its building; and $20,000 to the new Elkhorn Restaurant downtown.

If this money ends up helping to balance the city's budget, it won't be going to help either draw tourists to our region or foster business growth, expanding employment and creating new jobs. That would be a critical mistake at a time when UCEDC is filling up its plate with numerous projects that the city should be supporting. It would also be a mistake to eliminate funds that can be used to assist local businesses that need a grant to help them increase their production and create new jobs.

The motel tax should not be used to supplement the city's general fund. Why? Because it smacks of double taxation. Motels are already paying property and personal taxes that go toward city services. And most of the motel patrons never use the majority of the city's services.

We hope wiser heads will prevail when the city council makes its final decision on the budget. Cuts should come from another source.

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