Tourism and taxes

What is your opinion on raising the state transient room tax (TRT) 1 or 2 percent to fund holding the 2021 World Track and Field Championship in Eugene?

In a legislative update, Bend City Lobbyist Erik Kancler told Bend City Councilors the Legislature plans to try and pass this legislation.

And the extra money generated, that doesn’t go towards funding the Eugene championship event, would go to Travel Oregon “to be dispersed in a manner that either hasn’t been determined or hasn’t been revealed,” Kancler said.

If the legislation passes, he said all local hotels would have an additional 1 or 2 percent tax tacked on. Kancler said there’s a pretty strong conservative driven argument that if TRT taxes are going to increase, there are other more pressing needs than funding a sports event.

Currently, 70 percent of TRT dollars are required to go to tourism facilities or tourism promotion. In addition to the potential increase for the track and field event, he said there have been political discussions about creating more flexibility in how locally-generated TRT dollars can be spent.

“Could we potentially use that (money) for city services and infrastructure that are impacted by tourism, directly used by tourism? And in doing so, not only address things that are of interest of the community, but make sure tourism has the infrastructure not to have its hands tied and succeed in the future?” Kancler said.

While Kancler did not reference using TRT dollars to fund street preservation, that was an interest of the Bend City Council in 2015.

However, due to the state politics regarding the sporting event, and the short session, Kancler said he didn’t expect there to be any legislation that addressed how locally generated TRT dollars could be spent.

Bend City Councilors and Mayor Jim Clinton were not pleased to hear this news.

“If the state thinks we need to spend more money promoting tourism in Bend in the summer time, we will have to put a sign outside of city hall saying, please leave your torches and pitchforks outside. They will run us out,” said Bend City Council Barb Campbell. “Most of us in Bend think we’re doing plenty to promote more tourism, which is why I think we were all hoping to change that distribution, so we could spend less promoting tourism and more on the services that the tourists need.”

Kancler said Bend is not alone in wanting to use TRT dollars to support infrastructure. Other cities in Oregon are experiencing the same pain points. For example, he said cities on the Oregon coast are stating they don’t have the infrastructure to support more tourism.

However, he cautioned against going to the opposite extreme, taking all the money away from tourism promotion.

“Then, we’d have a different set of pitch forks,” he said.

The challenge, he said, is to figure out how to utilize TRT revenue as a tool that is relevant for the City of Bend.

Councilor Victor Chudowsky said he’s had a change of heart when it comes to how he thinks TRT dollars should be spent.

“If you do away with (the 70/30 split), I think the state runs a danger of having escalating tourism taxes among cities, kind of like tax competitions. It’s very easy to tax tourists and I think the end result of changes would be that statewide you would have … escalating room taxes. In other words, that 70/30 split idea was put in for a reason, to keep room taxes from going up and up and up incessantly.”

Kancler said he believed Chudowsky’s point would be the primary argument of opposition for changing the way TRT dollars are allocated.

“If there is any fruitful ground, it needs to honor the spirit that this money is coming from tourism, it needs to remain focused on tourism,” Kancler.

The Oregon Restaurant & Lodging Association (ORLA) submitted this fact sheet to the Bend Chamber to show the organization’s position support of the statewide TRT increase: ORLA position .

During the Jan. 20 work session, Kancler also told councilors there is also going to be legislation introduced for public transit funding during the short session.

About $22 million of state funding would essentially provide local matches for rural transit providers to entice federal funding to help support rural transit, he said.

“COIC (Central Oregon Intergovernmental Council) in Bend, in particular, would stand to benefit from that funding,” he said. “It would free up existing revenue for capital expenditures, aging busses and things like that.”

He said the effort could lead to a combined amount, between COIC and City of Bend, of about $3 million a biennium.

During the regular city council meeting, about half a dozen citizens testified during the public hearing on an ordinance amending the Bend Development Code primarily for accessory dwelling units (ADUs). There was a mix of opinions, ranging from concerns about an increase in density, to support for making it easier to build ADUs through the removal of the conditional use permit requirement.

A motion was made to keep the public hearing open until Feb. 3. Additional testimony will be accepted. Written comments will be accepted until 5 p.m. Feb.1. Send your written comments to Pauline Hardie at phardie@bendoregon.gov.

There was also a motion to authorize the preliminary design services of the Galveston Corridor by HDR Engineering Inc. in the amount of $196,657.00. The motion passed 5-1, with Chudowsky opposed. Councilor Sally Russell did not vote due to a conflict of interest.

 

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