Wiggins

UNION — Charlie Morden isn’t a fan of a new transient lodging tax the city of Union approved in March.

The city approved a 5% tax to be collected anywhere people are charged to stay for less than 30 days, such as hotels, recreational vehicle parks and bed-and-breakfasts.

Morden, the owner of the city’s lone hotel, the Union Hotel, and the adjacent RV park, said his room rates, which start at $118 a night, are among the lowest in the region but still are high in the minds of travelers.

“There is resistance by the public to pay more,” said Morden, who has not raised his rates in three years.

Morden said the tax will limit how much he can raise his rates, while attempting to keep up with inflation. Morden also said the tax will ultimately reduce how much money people coming to Union have to spend in the community. He said, for example, that some lodgers may be less likely to go downtown and buy a meal in a restaurant.

“There is only so much money that people have to spend,” he said. “You can’t keep raising prices. Folks have a limit.”

City leaders are making arrangements with the Oregon Department of Revenue to have the state agency collect the city’s 5% tax. The city is trying to finalize that by July 1, the earliest it can start collecting, according to Union City Administrator Doug Wiggins.

“The state has a system set up,” he said. “We will be integrating with it.”

State law will allow Union to use up to 5% of the tax’s revenue to cover collection costs. Seventy-five percent of the revenue from the tax will have to be spent on promoting tourism under state law, Wiggins said. Wiggins said the money could be used to pay for additions designed to draw in tourists, including the building of bike paths or a welcoming center. It also could be spent on building improvements at sites that attract tourists, including the Union County Museum and the Union Hotel.

The remaining revenue could go to the city’s general fund or toward tourism. Wiggins said he anticipates the city council will opt to spend the money on tourism.

At least two cities in Union County — La Grande and Elgin — have transient lodging taxes. In addition, everyone providing overnight lodging in Union County must pay a 3% county transient room tax and a state transient room tax. The state tax is 1.5%, according to the Oregon Department of Revenue’s website.

Morden said people who are traveling as part of their work are finding it difficult to stay in hotels and motels because their per diem has not been raised even though there is rampant inflation.

He said the tax could ultimately result in him converting the Union Hotel into an apartment-only complex.

“It puts me on the path to making it all apartments,” he said.

For a number of months he has been converting the Union Hotel’s third floor, which had been closed for years, into apartments.

Morden said he would make less money with an apartment-only complex but it would be less work to operate than a hotel.