Meals tax debated

While Ashland residents waited for the arrival of ballots for the Nov. 3 special election, stakeholders continue making their arguments over the fate of the city's prepared food and beverage tax.

Ballot measure 15-95 proposes extending Ashland's 5 percent food and beverage tax until 2030. Eighty percent of funds collected are used to pay off an existing debt on the city's wastewater treatment plant, while the remaining 20 percent is used to acquire open space to build parklands.

At a community forum on Saturday, local restaurant workers argued to end the prepared food tax, referred to as the meals tax, while political leaders asked voters to extend the tax another two decades. Ashland's chapter of the League of Women Voters and the Daily Tidings hosted the event, held at Southern Oregon University.

City Councilor Greg Lemhouse argued for extnding the tax, calling it a necessary measure amid rising utility rates. If the measure falls, the city would have to find other means of repaying the debt on the wastewater treatment plant, Lemhouse said.

"I think we have to say (the tax) has worked. We're paying off the debt we must pay," Lemhouse told the crowd of around 50.

The meals tax is scheduled to expire on Dec. 31, 2010. With debt on the treatment plant not scheduled for repayment until 2020, the yearly loan payments would likely come in the form of a rate hike on residents' sewer bills, Lemhouse said.

"I would rather let people have the option of how to spend their money," he said, "than for them to have to pay a sewer tax increase of 60 percent. People decide where to spend their money and how to spend their money, so let's let restaurants compete for that."

Denise Daehler, owner of Liquid Assets Wine Bar, sees it differently. Daehler is concerned the meals tax discourages visitors from dining in town, who instead are taking their business dollars out of the community. Neighboring towns have taken away from Ashland's yearly tourist revenue, Daehler said, since the tax was enacted in 1993.

"Ashland now competes with the whole valley for tourism dollars," she said.

Former mayor Cathy Shaw is a long-time proponent of the meals tax. Shaw said the tax is "a question of equity," adding that it is practical to collect tax revenue from tourists who eat and drink while visiting town. She also credited the 20 percent-earmark with increasing public parkland throughout town — land purchased through meals tax revenue.

The meals tax has drawn sharp criticism from several restaurant owners across town. Fifteen owners formed a political action committee in August, in a collaborative effort to see the tax sunset when its term expires next year. Among those members is Lark's Home Kitchen Cuisine, located within the Ashland Springs Hotel downtown.

Hotel food director Ava DeRosier joined Daehler on Saturday in arguing against an extension of the meals tax.

DeRosier said that, in a sluggish economy, the 5 percent tax is discouraging out of town residents from dining there, and forcing the restaurant to lay off workers.

"People are discouraged when they're handed their bill and see an extra amount they didn't expect to have," she said. "I do think we've put ourselves in a position where we're asking people not to come here, or only asking people who have enough money to come here to do so."

League of Women Voters representatives held the discussion to find common ground on a polarizing issue. At the forum, audience members were split into groups. Members of each group briefly discussed the priorities and values that guided their feelings on the measure.

Though advocates for and against the measure left the meeting as divided on the issue as before, they did agree voters should be fully informed of the implications — whether the tax is extended or allowed to expire — before voting.

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