Oregon hotels get hit by local and state taxes. (123RF)

A recent guest column in the Bend Bulletin lamented the failure of House Bill 2977 to pass in this legislative session, a bill intended to nearly double the statewide transient lodging tax (TLT).  The column’s authors included some misleading information that needs to be clarified and corrected.

Before correcting that information, it’s important to understand how and why the statewide TLT was created and the background of HB 2977.

In Oregon, before 2003, the state tourism promotion program was funded by Oregon Lottery dollars. In 2002, the governor asked the industry to help advertise in Europe and other foreign countries so Oregon could attract more international flights to Portland. The 2003 Legislature passed HB 2267, establishing a funding stream for the Oregon Tourism Commission (Travel Oregon) with support from the hospitality industry.

Lodging operators stepped up and agreed to fund their own state agency and give the state back the lottery dollars. As a result, the Oregon Tourism Commission became one of a few state agencies funded by a direct constituency.

The previous column claims Oregon has one of the lowest TLT’s in the country but that doesn’t account for the 117 local lodging taxes in place from cities and counties, driving the tax up as high as 16%.

It also claims the tax increase proposed in HB 2977 would allow for “a small portion of that revenue to be reinvested” in the Oregon Department of Fish and Wildlife (ODFW) and other state agencies. Almost doubling (1.5% to 2.75%) the TLT is hardly a “small portion” as it would equate to approximately $40 million in tax increases per year.

The primary purpose of the statewide lodging tax is to generate revenue from visitors to support tourism-related infrastructure, promotion, and development. Creating local jobs and supporting local economic development are key outcomes of these efforts.

While the previous guest column suggested examples of programs that may have been helped with a near-doubling of the statewide TLT, in reality, grants provided by Travel Oregon have already funded a number of impactful projects in Bend and the surrounding area:

• High Desert Museum: $150,000 to support the renovation of High Desert Museum’s 4,500 square foot permanent exhibition on the Indigenous Plateau, By Hand Through Memory.
• Mid-Columbia Economic Development District: $150,000 to achieve Dark Sky International’s Lodging designation for the Antelope Cabin Project.
• Oregon Adaptive Sports: $60,000 to expand program offerings by developing and implementing a world-class adaptive paddling program in the Central Oregon and Cascade Lakes region and expanding opportunities for individuals with disabilities to participate in transformative outdoor experiences.
• High Desert Food & Farm Alliance: $120,385 to support a marketing campaign inspiring visitors to explore Central Oregon by showcasing local farms, food producers, and restaurants committed to using local ingredients.
  And these are just a few examples of direct investment from TLT dollars in projects benefiting visitors and residents.

Adding this additional tax on visitors, meeting planners, business groups, and producers of conferences and events will negatively impact travel demand in Oregon. Higher taxes will threaten economic development and job creation for many communities in Oregon.

An additional statewide lodging tax of 1.25% would take cities like Portland’s total lodging tax burden to 17.25% — making it the second highest taxed location along the entire west coast for business meetings and conference bookings.

Twenty-two years ago, the hospitality industry agreed to self-impose a tax on its customers to promote job growth and economic development, helping local communities and the entire state during a time of need. That agreement needs to be honored as we continue to utilize dedicated tourism tax revenue for direct tourism investments for the purpose of economic development in communities across Oregon.

Jason Brandt is the president and CEO of the Oregon Restaurant & Lodging Association.  Greg Astley is the director of government affairs of the Oregon Restaurant & Lodging Association.