ASHLAND — Opponents of the 5 percent Ashland meals tax say it violates Oregon's tax-free reputation, drains the town's lifeblood of jobs and tourist dollars and should be allowed to expire next year.

ASHLAND — Opponents of the 5 percent Ashland meals tax say it violates Oregon's tax-free reputation, drains the town's lifeblood of jobs and tourist dollars and should be allowed to expire next year.

But proponents urge renewal of the levy at the polls Nov. 3 because it's fair, hitting both residents and tourists — and is critical for paying off debt on the city's wastewater treatment improvements.

In the opening public forum on the contentious, 16-year-old tax, held by the Ashland Chamber of Commerce and Southern Oregon University, the sides seemed to represent a face-off of business owners against present and former city officials.

Straddling both camps, Alex Amarotico, a former city councilman and owner of Standing Stone Brewing Co., said his time inside city hall showed him how hard it is to come up with revenue. And if a source is eliminated "you have to find money somewhere else." Rejection of the tax, he said, would mean significant increases in sewage rates — 62 percent for businesses — and would result in a loss of 5,000 customers a year and jobs along with it.

Opposing the tax, Don Anway, general manager of Lithia Springs Hotel, told many tales of weddings, tour groups and conferences coming to Ashland for their event, but, because of the meals tax, going to Jacksonville for dinner and Medford for lodging.

Anway and Liquid Assets Wine Bar owner Denise Daehler pointed out that while Oregon Shakespeare Festival ticket sales have increased in recent years, hotel revenues have decreased, thus proving the levy is anathema to tourists.

"The economy is very fragile," Daehler said. "I've never seen anything like it in my lifetime. There's soaring unemployment and real estate values are declining. Sales are stagnant with increasing health care costs — and, in general, businesses are closing"¦This is not the time for a new tax."

A prime mover in creation of the tax, former Ashland Mayor Cathy Shaw, said Oregon has many sales taxes — on gasoline, alcohol, cigarettes, lodging — and that the levy is "good for business" because, "imagine what it would look like here if land weren't set aside for open space. In this era of government-bashing, we should be proud of it."

Ashland's is the only voter-approved sales tax in Oregon, according to the city Web site, with 4 percent going to wastewater treatment and 1 percent to open space.

Shaw disputed the notion that the wastewater plant was created to support growth, noting it was required by the state to lower effluent temperatures for stream health. Ashland, she said, already had a large wastewater capacity because of its history of canneries.

Pointing out the unfairness of the tax on prepared food and beverages, Anway and Daehler said the Ashland Food Cooperative, overwhelmingly used by locals, not tourists, is the biggest contributor of the tax.

"The original purpose of the tax has been fulfilled," said Anway, noting he's had to cut 15 jobs this year due to lack of business. He suggested using the lodging tax as replacement revenue for wastewater.

"The tax has a negative impact on the community," said Anway. "I repeatedly saw loss of conferences and tour groups to Medford (when he managed the Red Lion there). This dinner tax distinguishes us from any other community in Oregon. Tourists come here and expect it to be tax-free. We're losing thousands of dollars in lodging revenues."

Mayor John Stromberg, who watched the panel from the audience, said he supports renewal of the tax because "it gets visitors here to pay the wastewater debt and improvements for the parks, and it's progressive compared to charging residents higher wastewater rates.

"Residents have a choice to pay the tax (by not going out to dinner) or not," Stromberg said.

Michael Gibbs, owner of Winchester Inn and former Chamber of Commerce president, said he opposes the tax because it's contributing to loss of business from groups. He has had to lay off three to five people this year.

"It's hard to look them in the face and say, 'Sorry, we don't have the business,' " Gibbs said.

The audience of about 40 was invited to submit written questions to the panel, but not to comment. The forum can be viewed on Channel 20 and at until Election Day.