State lodging tax increase grabs blue ribbon in race to finish legislative session
SALEM Oregon lawmakers passed a bill Thursday to nearly double the statewide tourist lodging tax and open up new ways to spend the revenue.
The bill hikes the tax from 1 percent to 1.8 percent until the end of June 2020, then reduces it to 1.5 percent in July 2021.
The votes to pass the bill in the House and Senate were among the last actions lawmakers took before they adjourned on Thursday. The bill will head next to Gov. Kate Brown for her signature.
The legislation clears the way for the state to subsidize 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.
State law requires the government to spend at least 80 percent of lodging tax revenues on tourism marketing. House Bill 4146 allows the state to spend that money on any tourism programs, including to subsidize the costs of events such as the track championship.
Lawmakers amended the bill multiple times in response to criticism from both Portland-area tourism officials and rural legislators. Rural Republicans said hotel and motel owners in their districts did not believe they would benefit from the additional tax revenues. At the same time, 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 and make it difficult for local governments to raise their own tourism taxes.
In response, lawmakers reduced the size of the tax increase and created a new mandate for the state to allocate 20 percent of the money to regional tourism bureaus and 10 percent to competitive grants. In the two-year budget that begins in mid-2017, the bill would raise a total of $27.4 million in new tax revenue, according to an estimate from the Legislative Revenue Office.
The House passed an earlier version of the bill last month. But because a Senate committee made changes, lawmakers in both the House and Senate had to vote on the bill Thursday in order for it to pass. The bill passed on an 18-12 vote in the Senate and a final 38-22 vote in the House.
Sen. Chris Edwards, D-Eugene, carried the bill on the floor Thursday and acknowledged it originated from TrackTowns request for public money.
We all know this is a bill that is necessary for Travel Oregon to be able to better support the world games coming to Oregon in 2021, Edwards said. But this bill in no way assures that TrackTown and the world games will be eligible for that money. Theres a public process.
Sen. Jeff Kruse, R-Roseberg, said the request from the track event organizers was the only reason lawmakers were considering the bill.
Quite honestly, if there hadnt been an ask from Eugene, we wouldnt even be doing this now, Kruse said.