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Hotels oppose room tax

Representatives from two local hotels attended the Nov. 24 City Council meeting to ask River Falls not to increase its room tax from 5% to 8%.

Dustin Hanson spoke on behalf of Best Western and said the tax hike creates a competitive disadvantage for River Falls. He also said hotel guests shouldn't be charged so much considering that the money collected via the room tax is to be spent on tourism, which benefits more entities than just the hotels.

Owner of the Crossings Inn & Suites, Rod Lindquist, and its General Manager, Stephanie Johnson, agreed. She said the increase would have the opposite effect by driving people to Hudson, where the room tax is 3%.

"People are calling and asking: 'What is our (final) cost?'" Johnson assured.

Lindquist declared he isn't opposed to a lodging tax but doesn't want to see it go to the level being proposed in River Falls. It would bring occupancy down even more. He said, "It could not be a worse time to throw the hotel industry under the bus."

The Council began asking questions about the room tax, which the city voted to create in June 2008. Mayor Don Richards asked if the room-tax dollars, 70% of which go toward marketing River Falls as a tourism destination, had been effective.

He asked if any studies showed the effectiveness or ineffectiveness of an increase in other cities that had raised their lodging tax. Finance Director Julie Bergstrom said River Falls had not looked for that type of information.

Council Member Joleen Larson said the city had not yet measured what effect the one-year-old room tax has had. She pointed out that the 3% increase would not go to the Chamber of Commerce as additional tourism-marketing money; it would be used by the city to pay annual tourism expenses like River Falls Days.

With more input from the hotel representatives, the Council discussed many aspects of the increase then voted to table the issue, at least until it can gather more information about the tax's effectiveness.

Read more on this story and other Council-meeting action in the Dec. 3 print edition of the River Falls Journal.