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Survey suggests Ashland meals tax quells business

ASHLAND — Opponents of the city's meals tax say a survey they conducted shows that nearly half of Medford, Central Point and Phoenix residents would eat out more often in Ashland if voters dump the tax.

Extrapolating from the survey, opponents of the tax claim it costs Ashland nearly $1.87 million per month in lost business to restaurants and shops — or more than $22.4 million each year.

On Monday night, 11 people from the local restaurant industry randomly called 120 residents of three surrounding towns. They released the results of the survey Tuesday.

The residents were asked, "Does the fact that Ashland has a sales tax at restaurants affect your decision to dine there?" Of the people who answered the question, 51 people, or 45.1 percent of respondents, answered "Yes," while 62, 54.9 percent, answered "No."

People were then asked, "In November, Ashland voters will decide to extend or not extend the meals tax. If it is defeated and there is no longer a sales tax at restaurants, would you eat out more often in Ashland?" For that question, 57 people, or 49.6 percent of respondents, said "Yes," while 58 people, 50.4 percent, said "No."

Ashland Springs Hotel General Manager Don Anway, who helped on the survey, said many people who live outside Ashland didn't have to be told that Ashland has a sales tax on prepared meals.

The first question on the survey asked how often people eat out in Ashland each month. The majority, 83 people, said they eat out zero times in Ashland per month, while 27 people gave varying answers that they ate out in Ashland from one to seven times a month.

"They would say, 'We don't eat out in Ashland because of the tax,'" Anway said. "We have a big issue here."

The Ashland Springs Hotel, which has an on-site restaurant, has joined with at least 14 restaurateurs in a Political Action Committee formed to defeat the meals tax renewal. The 5 percent tax sunsets in 2010 if not renewed.

About 80 percent of the tax goes to make payments on debt incurred to upgrade the Ashland sewage treatment plant to meet tightening Oregon Department of Environmental Quality standards. The remaining 20 percent goes to fund park land purchases.

Sewage bills could rise by 60 percent if the meals tax is not renewed, city of Ashland staff say.

In an analysis of the survey results, Curtis Hayden, president of Oregon Market Research and editor at Sneak Preview magazine, said the meals tax is costing Ashland $1.87 million per month and $22.4 million each year in lost business.

"It is undeniable from this survey: The sales tax on food is devastating to the local economy," he wrote in his analysis.

Hayden reached his figures by concluding that 49.6 percent of Jackson County's 179,000 residents would eat out one more time each month in Ashland without the tax. He said each person would spend $21.05 on each visit to Ashland.

City of Ashland Finance Director Lee Tuneberg said opponents of the meals tax renewal can interpret the results of their unscientific survey as they wish.

"I don't have a response to the survey," he said. "I find the numbers are interesting, but I question the math." Tuneberg said Ashland voters will have to decide for themselves in November whether they want to continue paying the meals tax if they eat out, or if they want to pay higher sewage bills.

"This town was built on tourism and we have a larger treatment plant because of tourism," he said. "The treatment plant was built to handle the amount of demand we have. It's a tough call. I can't advocate one way or another. We have debt service we have to pay. I don't know how we can generate revenue to make up for the lost tax revenues if we don't put it in the rates themselves."

To cover lost meals tax revenue, a typical two-person household would see its sewer bill increase from $16.18 per month to $25.88. The monthly bill for a typical four-person family would rise from $21.02 to $33.64, city officials have said.

Since its inception in 1993, the tax has generated $22.5 million, with $18 million going to make debt payments on Ashland's sewage treatment plant and $4.5 million used to buy park land.

Vickie Aldous is a reporter for the Ashland Daily Tidings. She can be reached at 479-8199 or vlaldous@yahoo.com.