SALEM A bill that will nearly double Oregons statewide tourist lodging tax is headed to the state Senate, after lawmakers in the House voted 37-20 Tuesday to pass the bill.
The bill hikes the tax rate from 1 percent, to 1.8 percent.
Lawmakers drafted the bill in response to a request for a state subsidy from organizers of a world track championship in Eugene in 2021. Nike and University of Oregon officials have pushed for the state to help pay for the event since at least 2014 and according to news reports, the Eugene nonprofit TrackTown USA wants the state to provide $25 million for the event.
Rep. Nancy Nathanson, D-Eugene, a chief sponsor of the bill, described the measure as an economic development proposal.
More than three-quarters of this (tax) is paid by people from out of state, Nathanson said. Tourism is a significant sector in Oregons economy.
State law requires the government to spend at least 80 percent of hotel tax revenues on tourism marketing. House Bill 4146 would allow the state to spend that money on any tourism programs, including to subsidize the costs of events such as the track championship.
The bill would require the states tourism commission, TravelOregon, to distribute set amounts of lodging tax revenue around the state through regional allocations and competitive grants.
In the two-year budget that begins in mid-2017, the bill would result in $27.4 million in new tax revenue, according to an estimate from the Legislative Revenue Office. The state would send $11 million in existing and new tax revenue to regional tourism agencies around the state during that period, and award $5.4 million in competitive grants to encourage tourism.
Lawmakers in the House were originally scheduled to hold a floor vote on the bill Feb. 19, but in response to criticism from both Portland-area tourism officials and rural legislators, Nathanson asked for it to be referred back to the House Committee on Revenue for changes.
Rural Republicans said hotel and motel owners in their districts did not expect to benefit from the additional tax revenue, while tourism officials in the Portland metropolitan area worried that doubling the state lodging tax would put Portland at a competitive disadvantage to other cities with lower tax rates.
Democrats from the coast spoke and a Republican from Eastern Oregon also spoke in favor of the bill. Im going to support this bill because whats good for tourism is good for the coast, said Rep. David Gomberg, D-Otis, although he added that most of the people that visit dwellings on the coast are from your districts, not from out of state.
Rep. Caddy McKeown, D-Coos Bay, is a chief sponsor of the bill and had high praise for the 2021 track championship.
McKeown said the event will take place at the track center of the United States and arguably the world, and broadcast in hundreds of countries. There will be people traveling here to train, McKeown said. There will be a spotlight on this state of the magnitude that is mind boggling. Im very proud of the opportunity that we have to bring visitors from across the state to our small state.
Rep. Greg Smith, R-Heppner, said tourism is not a major industry in his district but he expects the bill will benefit other communities around the state. Folks are not coming to District 57 for tourism related reasons, Smith said. They dont stop in Rufus or Biggs for an afternoon of tourism ... Were industrial, were agricultural. However, Smith said this bill is about the good of Oregon as a whole.
Rep. Gene Whisnant, R-Sunriver, voted against the bill and said it would make it more difficult for cities and counties to increase local lodging taxes, which Whisnant said provide a greater benefit to those communities.
The League of Oregon Cities, which represents the interest of city governments around the state, has remained neutral on the bill because cities around the state disagree on the issue.
The League continues to not take a position on the state lodging tax increase itself due to a lack of municipal consensus on the proposal, Wendy Johnson, an intergovernmental relations associate for the league wrote in an email Tuesday afternoon.
However, Johnson wrote that the league supported the increased regional allocations of tourism tax revenue and the relaxation of restrictions on how state lodging tax revenues are spent to focus less on marketing and more on facilities and events.