Selling Missoula 

Bed tax fight reveals rift in the business community

A deadline this week to submit bed tax bids has passed without crisis after a summit called between rival business groups three weeks ago ended in a détente.

At stake are about $100,000 in funds earmarked for promoting Missoula outside the state as a tourist destination.

Currently, the Missoula Area Chamber of Commerce maintains a Web site, purchases advertisements, publishes a travel brochure, and networks with convention organizers, according to Vicki Judd, the outgoing president of the Chamber’s board of directors.

Supporters of the nascent Convention and Visitors Bureau, however, would like to see that amount tripled with new fundraising projects and would like to see Missoula cut a larger profile in the tourism industry, according to the group’s president, Kimberly Roth.

The Chamber itself has a committee called the Convention and Visitors Bureau, through which bed tax funds have been administered for a decade. But this spring Roth and others who were dissatisfied with the status quo discovered that the name had not been officially registered with the state and did so themselves.

Suddenly, there were two organizations with the same name and a lot of people wondering how they would resolve the conflict between the Chamber—which functions for its business members who collectively support it with dues—and the Bureau, which intends to work for the tourist industry as a whole.

On the surface, everyone speaks the same language of cooperation and promoting economic development.

“We support them 100 percent,” says Judd of the Convention and Visitor Bureau. “But what’s difficult is that we’re a member organization and we need to protect the interests of those who are not involved directly in tourism.”

That message is similar to the one promulgated by the Bureau, with its critique of the Chamber’s dues-paying membership structure.

“The Chamber enhances their membership, not the whole community,” Roth says. “They need to protect their membership. There’s nothing wrong with that.”

However, Bureau supporters allege that the traditional Chamber of Commerce model makes tourism subordinate to the business interests of its members, which in turn means the state’s second most important economic sector (after agriculture) has been underdeveloped.

“If tourism isn’t promoted effectively, Missoula suffers,” Roth says. That both groups want out-of-state travelers to bring their dollars and leave them here is undisputed. But their different approaches may be illustrated by who works for whom. Judd, whose term expires this week, is employed by NorthWestern Energy, the successor to Montana Power Co., and president-elect Bob Boschee works for Smurfit-Stone, both dependable if staid components of the local economy.

Meantime, Roth works for Southgate Mall as marketing director, and Erickson manages a Reserve Street hotel, both hallmarks of the newer tourism and service-based economy.

Bed tax dollars are collected by the state Department of Revenue and distributed to communities in proportion to their contribution. In 1987 and again in 1988, the Missoula City Council voted to dedicate funds to the Chamber. Since then funds have defaulted to the Chamber each year and no one has questioned the process until now.

But in February, Roth inquired at the state level and learned that city councils decide who receives bed-tax funds. Roth redirected her inquiry to Mayor Mike Kadas, who agreed the city needed to make a formal request for proposals, which were due this week.

The resulting tension between members of the Chamber and the Bureau—board members of both organizations include almost every aspect of the local economy—eventually required mediation and the participation of Kadas.

At a May 31 meeting, the Bureau agreed to pull its bid on the bed tax funds for this year only. In exchange, the Chamber agreed to address several issues should the entities remain conjoined, including: To whom will the director of the Bureau report, and how can Chamber dues and Bureau bed tax funds be separated?

In an effort to win support for their positions, both parties cite examples that work elsewhere.

Judd mentions the Billings Convention and Visitors Bureau, which receives about $140,000 in bed tax funds and is operated together with the local Chamber. Billings has about 3,500 hotel or motel rooms and the funds are not large enough to warrant separate agencies with duplicate administrative expenses, says Judd.

Roth, however, points to the Boise Convention and Visitors Bureau, which receives almost $1 million in state tax revenues and which operates separately from its local Chamber. Boise has about 4,500 rooms and has been independent for two decades.

Missoula, by contrast, receives slightly more than $100,000 in bed tax funds and has 2,500 rooms. Although Missoula has scenic attractions, it doesn’t have the volume of convention space of either Billings or Boise. Additionally, Idaho collects and distributes bed tax funds differently than Montana.

Clearly, the episode demonstrates that concerns over Montana’s tourism industry are felt of by the entire business community and reflect a growing unease with who speaks as the voice of Missoula’s “business community.” “People don’t come to Missoula for the mall and they don’t come to Missoula for my hotel,” says Bureau Treasurer Mary Erickson. “They come for the whole package.”

And clearly, the name game, the bed tax bid, and the subsequent summit have changed the way different business sectors see each other.

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