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State's bed tax doesn't need fixing

| March 21, 2021 12:00 AM

Flathead Valley businesses know well how important tourism marketing is for this area. Without the efforts of our convention and visitor bureaus here — Kalispell, Whitefish and Flathead County — along with all of the promotion provided by local chambers of commerce and other groups, the Flathead’s visitor economy would not be the thriving entity it is today.

Revenue from the state’s 8% bed tax on hotels, motels, campgrounds, short-term rentals and other lodging provides vital funding for the convention and visitor bureaus, but two pieces of proposed legislation now threaten that financial stability.

An amendment to a House budget bill introduced last week by Rep. Dan Bartel, R-Lewistown, plus a companion bill, would give lawmakers discretion over more of the state's bed tax revenue, removing the statutory requirement that a portion goes to the Department of Commerce.

In addition, Senate Bill 355, sponsored by Sen. Mike Lang, R-Malta, would divert a portion of bed tax revenue to counties with large amounts of state land.

Discover Kalispell, the brand name for the Kalispell Convention and Visitor Bureau, has taken a leadership role in opposing the legislation. This organization has made great strides in establishing flagship events in the Flathead that businesses have come to rely on for their bottom line. The popular Montana Dragon Boat Festival and Spartan Race are a couple of visitor drawing cards that come to mind.

Local CVBs also provide strategic marketing that draws visitors to places such as Whitefish Mountain Resort, and they’re constantly working to draw conventions to the Flathead.

Diane Medler, executive director of Discover Kalispell, rightly pointed out that if the statutory requirement for funding is dropped, there is much less “predictability and guarantee of what our funding will be.” Bed tax revenue accounts for about a third of Discover Kalispell’s budget.

The argument made by some legislators about a lack of oversight of the state’s tourism promotion activities is simply unfounded, Medler said, and we agree. There already is copious oversight of marketing plans and financial reports for CVBs.

We understand the conundrum for communities such as Malta, on Montana’s Hi-Line, where state land draws hunters and other tourists, yet those counties can’t collect property taxes on state lands to offset the impacts. But we dare say this isn’t an apples-to-apples scenario.

Tourist impacts on those remote counties pale in comparison to Flathead County, where visitors spent around $613.5 million in 2019 and visitation to Glacier Park was just over 3 million that same year.

Montana’s bed tax isn’t broken, so why mess with success? We commend Discover Kalispell for taking a stand in opposing legislation that threatens to negatively affect not only our local CVBs but also the Flathead visitor economy.