If state takes bigger bite from visitors, local governments fear they won't get a nibble

Oregon Gov. Ted Kulongoski isn't alone in pushing for a bigger bang from tourism as a quick and effective way to put the state's staggering economy back on track.

What the executive director of the Portland Oregon Visitors Association calls a 'pretty powerful and diverse group' is lobbying heavily in Salem for passage of a bill that would establish a 1 percent state transient lodging tax. Its estimated $7 million in proceeds would be spent on promoting and marketing Oregon tourism.

'There are a lot of different business groups, different entities, that think this is a good thing for Oregon, certainly with the economy as bad as it is,' the association's Joe D'Alessandro says.

Sponsored by the Oregon Economic and Community Development Department and the Oregon Tourism Commission, supporters of the Oregon Tourism Investment Proposal include several industry heavyweights, led by the Oregon Lodging Association. Also lobbying for House Bill 2267: the Oregon Restaurant Association, the state's beer and wine distributors, POVA and the Port of Portland.

'It's the type of coalition you don't see all the time,' D'Alessandro says. 'I think this is a good thing for Oregon.'

Marty Brantley, the new head of the state economic development department, says it's the right time for Oregon to market itself. 'We're looked up to as a very valuable, special place, but we haven't done much about it,' he says.

Now, with Lufthansa, the German airline poised to start nonstop flights between Portland and Frankfurt on March 31, and the expanded Oregon Convention Center soon to emerge as the West Coast's largest convention facility, the state needs to work on expanding its tourism industry, which in 1999 yielded $5.5 billion in visitor expenditures.

But a national ranking of how much states spend on marketing and promotion shows Oregon, with its annual expenditure of just over $3 million, huddled near the bottom of the list at 46th place. Hawaii, by comparison, shelled out $71 million to come in first.

'We're operating some of the strongest, most effective ad campaigns in the country, yet we are losing market share,' says Todd Davidson, executive director of Oregon Tourism. 'That's not my quote, it's what researchers have told us.

'Frankly,' he adds, 'as beautiful as Oregon is, if we can't be more top-of-mind as a visitors' destination, we're going to lose them to somebody else.'

Where Lufthansa's concerned, he says, 'if we don't market Oregon in Europe, there's no guarantee they're going to be here long term. We have to make Oregon a compelling destination.'

Adding the lodging tax money to the current $3 million in lottery funds allotted for tourist promotion would make $10 million a year available for promotion.

Davidson says that would allow Oregon to extend its tourism enticements far outside the current focus, which mostly is twice-a-year magazine ads aimed at residents of Oregon, Washington and Northern California.

The bill also would revamp the structure of the Tourism Commission, expanding its membership from nine to 15, with nine of the new semigovernmental board's members nominated by the lodging industry, four named by the governor and one each by the speaker of the House and the Senate president.

However, the bill has a phalanx of foes, including the League of Oregon Cities and the Association of Oregon Counties. The two organizations oppose HB 2267 because it would prohibit new or increased local lodging taxes ÑÊunless the proceeds are used only for tourism promotion or tourism-related facilities.

'We support their efforts, but not on the back of local governments,' says Ken Strobeck, executive director of the League of Oregon Cities.

A lodging industry-sponsored proposal for a statewide lodging tax failed during the Legislature's last session, he notes. 'This is an old idea that basically stops all local governments from being able to impose any kind of tax on tourists.'

Lodging tax pays local bills

For many cities and counties, Strobeck says, a local lodging tax provides funding to pay some of the costs of increased tourism, from fire and police protection to expanded water and sanitary sewer systems.

Eighty of Oregon's 240 incorporated cities have some sort of transient lodging tax; 14 of the 36 counties also assess a lodging tax.

In The Dalles, the city hands most of a 6 percent lodging tax over to The Dalles Area Chamber of Commerce, which uses it to run the city's visitors center, and to pay for advertising; last year, the chamber got $196,000.

Susan Huntington, executive director of The Dalles' chamber, bitterly opposes HB 2267, chiefly because of local control issues.

Oregon Tourism, she complains, is 'so Willamette Valley-focused. Every once in a while they throw out a bone. Bend is kind of a darling, but the more rural areas in the state really have a struggle. Oregon Tourism is underfunded, which makes them even less effective for everybody that needs their assistance.'

Hood River County's Board of Commissioners voted at its last meeting to oppose HB 2267. The county hands over 90 percent of the $150,000 collected annually to the visitors council of the Hood River County Chamber of Commerce.

What commissioners objected to, County Administrator Dave Meriwether says, 'is the micromanagement in terms of local government authority and autonomy. At the same time, there was concern about the somewhat predatory nature of dipping into a revenue source heretofore reserved for local government.'

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