Every time a conversation about funding the streets or local cops comes up, some in the community will use it as an opportunity to ask, “How can we get tourists to pay more of their fair share?” In Bend, the City Council tried in 2016 to increase the local gas tax to make that happen. Voters voted it down. Not long ago, the City Council implemented a transportation fee, tacked onto residents’ Bend utility bills, to address what they said was a gap between income and expenses.
Currently, the way that tourists contribute to the coffers of local governments is through a Transient Lodging Tax tacked on to visitors’ bills when they stay at hotels or short-term rentals. The numbers are a bit confusing because of various changes that have been made over the years, but basically, right now in Bend, the City of Bend gets 68.8% of that TLT for its general fund, while the other 31.27% goes to Visit Bend to fund tourism promotion and tourism-related facilities. In Deschutes County, the split is 70/30, with the County getting 70% and the other 30% going to Visit Central Oregon. For fiscal year 2026, that split means an anticipated $4.97 million for Visit Bend, and $9.4 million for the City of Bend.
Bend and Deschutes County put their TLT programs in place before state-level changes to the allocations came into place in 2003. That year, the state put rules in place around how much should go toward general funds versus tourism promotion. Any local governments that had plans in place before that are grandfathered into seeing a different piece of the pie go toward their general funds, compared to cities that didn’t have things in place before that time. For example, the City of McMinnville, under the post-2003 rules, currently sends 70% of its TLT to tourism promotion, with 30% going toward the city’s general fund. You can imagine how that city would feel about a more even split.
Cities such as those have been asking for the state to amend the rules around the allocations, arguing that it makes no sense to entice tourists to come to places where the roads are crumbling and emergency services don’t have resources to respond.
Last week, the Oregon State Legislative Assembly passed HB 4148, which offers local governments more flexibility in the way they divide monies from Transient Lodging Taxes. Added onto the bill is the opportunity for governments or destination marketing organizations to carve out some of those dollars for “business resiliency grants” that could go to struggling restaurant and lodging businesses.
In Bend, the passage of HB 4148 could mean that the City gets an estimated 4% or 5% more than it’s currently getting, according to Visit Bend calculations — amounting to between $575,092 to $718,865 more, based on 2026 anticipated room tax collections. It might sound like a drop in the bucket compared to Bend’s $1.48 billion two-year budget, but it’s also not nothing.
Following the passage of HB 4148, cities, counties and destination marketing organizations around the state are going to enter negotiation mode. The bill doesn’t necessarily mandate any changes; rather, the entities involved will need to work it out. DMOs like Visit Bend will argue that reducing tourism promotion dollars has the very real effect of reducing the number of people who come to town. Cities like Bend, which stand to get a bigger piece of the pie, will continue to point out that essential services need to be up to snuff to serve residents and visitors alike. In a political landscape where reductions in federal contributions are trickling down to reductions in local budgets, cities and counties may see this as a way to fill the holes. But as Bend Mayor Melanie Kebler pointed out in a conversation with the Source, these are all patchwork fixes that shore up budget gaps that some legislators pointed out could be filled with property tax reform or a sales tax.
Right now, a big conversation is brewing in the state about how to increase economic prosperity, and how to attract industry into the state. Business folks in the state like to say that Oregon’s taxes are high compared to other states — but overall, our state ranks in the middle range for overall tax burden. Corporate taxes, on the other hand, are relatively high. Would a sales tax or property tax reform right that ship and allow us to lower burdens on business? We’re not going to hold our breath that either will happen anytime soon.
Editor’s note: The print edition of this opinion stated that voters would have the opportunity to vote upon changes to the allocations to the city; that was incorrect. Voters only vote upon proposed increases to room taxes. We regret the error. In addition, attribution has been added in the sixth paragraph to indicate that the 4 to 5% increase calculation came from Visit Bend.
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Regarding this post to have tourists help with costs for city services, don’t forget the Lute the Deschutes guy who cleans up the river after everyone..what a treasure this guy is.
Recent discussion about tourism taxes and the potential reallocation of Transient Lodging Tax funds raises an important question: who is actually paying to support Bend’s infrastructure?
Voters rejected a local gas tax in 2016. More recently, however, the Bend City Council implemented a transportation fee that is added to residents’ water and sewer bills — a mechanism that allowed the council to avoid putting the measure to a public vote. While technically permissible, placing a recurring charge on residents without voter input does not reflect the spirit of a transparent democratic process.
This fee is paid only by residents within city limits. County residents and the many tourists who rely on Bend’s roads and services contribute nothing through this particular funding mechanism, despite benefiting from the same infrastructure.
At the same time, a significant portion of Transient Lodging Tax revenue continues to fund tourism promotion through Visit Bend — nearly $5 million projected for 2026. Tourism is vital to Bend’s economy, but it is reasonable to ask whether some of those funds could instead support the roads and services used by residents and visitors alike.
City leaders often campaign on affordability and fiscal responsibility. Yet decisions such as imposing new utility-based fees on residents, while also granting municipal tax deferments to developers, raise legitimate questions about whether the broader interests of Bend residents are being prioritized.
As discussions continue about changes to lodging tax allocations under HB 4148, Bend residents deserve transparency, fairness, and a meaningful voice in how these financial decisions are made.