This week, leaders in local government and destination management organizations alike submitted testimony about a bill moving through the Oregon Legislative Assembly, which seeks to make some changes in how future monies garnered by tourism are used. HB 3556 “extends the permissible uses of net revenue from a new or increased transient local lodging tax to include public safety services and certain costs related to ‘community infrastructure.'”
In other words, the bill would give local governments more flexibility in how they use taxes that come in from hotels and short-term rentals. Right now, in Bend and Deschutes County, 70% of any money garnered from room taxes goes to the city or county’s general fund, while about 30% goes to destination marketing organizations that use the funds for tourism promotion. Bend Mayor Melanie Kebler and the Deschutes County Board of Commissioners submitted testimony in favor of the bill, which they see as a way for them to pour more funds into public safety and infrastructure support.
DMOs such as Visit Central Oregon, and others around the state, are opposed, pointing out the economic benefits that tourism brings to the state. They’re also concerned about some ambiguity in the way the bill is written, and what “new or increased” revenue really means. To address the fact that the meat of the bill doesn’t touch on what “new” means, in their written testimony, Deschutes County Commissioners asked the legislative committee leaders overseeing the bill to be sure the bill clarifies that it apply only to “newly” implemented taxes or increases to existing taxes, which would require the support of voters.
That’s the interpretation of the bill that might see it having the best chance of passing. Under that interpretation, to see any more money from tourism dollars going to public safety or infrastructure support, a city or county would have to go out and ask voters to increase the amount of tax being gathered by hotels or short-term rentals. Then, only the new portion of those funds could be used in the new way.
Local government leaders contend that tourists place a strain on law enforcement resources, and they’d like a new way to cover some of those costs. If this bill truly only uses “new” funds, that seems like a good use of those funds. DMOs would continue to be funded to promote tourism, and local governments would have more support in helping keep people safe and providing basic services.
Provided that the ambiguity is cleared up, it seems an endeavor worth pursuing — but it also begs a perennial question, often asked by our readers: How much money do DMOs need, in a place as tourist-saturated as Bend? Testimony submitted by average citizens about the bill speaks to that issue. Some who offered testimony believe we spend too much money on marketing the city.
Lately, DMOs in our area have been making some bold moves in how they spend the money garnered by room taxes. Visit Bend has its Sustainability Fund and Cultural Tourism Fund, both which supply grant funding to local nonprofits and others for things like restoring habitat along the Deschutes River, or marketing events like BendFilm or the recent Bendi Gras. Adding these funds made the idea of giving so much money to DMOs more palatable to the public. It was a stroke of genius that has also benefited many local events (including some owned by the parent company of the Source).
But can we get even more creative, in service of the people who work in tourism?
We’ve long mused about whether there were even broader interpretations those DMOs can make. If those funds can be used for trail building, could they also be used to supply much-needed tourist workforce housing, for example? Wouldn’t that, too, be supporting tourism and tourism promotion, since it could, in theory, help temper wage costs?
When it comes to tourism and room taxes, much has and will be said about how those funds should be used. But even as there’s currently a conversation afoot about flexibility on the front end, we believe there’s room for a conversation about flexibility on the back end, too.
This article appears in The Source Weekly March 27, 2025.
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“Local government leaders contend that tourists place a strain on law enforcement resources …”
Oh yeah? Prove it! More likely is the fact that this council never met a tax they didn’t like. The truth is that you could take the TOT to zero (which would be a great idea) and tourism would still more than pay its way in Central Oregon.
The Source Editorial Board suggests that using the funds to “supply much-needed tourist workforce housing” could “help temper wage costs”. Do you really mean starting government housing projects, which have been historic failures, as a way to reduce the rock bottom wages in hospitality? Yikes.