Coastal cities in Oregon are rallying against House Bill 3962A, which proposes a significant change to the distribution of transient lodging tax (TLT) revenues. During a recent Senate Committee on Finance and Revenue meeting, mayors from various coastal communities voiced their concerns, emphasizing the potential negative impact on the tourism industry, a vital economic driver for the region.

Mayor Joe Benetti of Coos Bay opened the discussion, highlighting that tourism generates over $651 million in local and state taxes. He argued that the proposed bill would increase the TLT allocation for coastal cities to 80%, leaving only 20% for tourism promotion. This shift, he warned, could devastate the tourism sector, which relies on effective marketing to attract visitors. Benetti pointed out that the current funding structure has been successful and urged the committee not to disrupt it.

Mayor Steve Wright of Seaside presented a contrasting viewpoint, advocating for the bill as a necessary update to an outdated framework. He noted that while tourism is crucial, the infrastructure in small towns is often overwhelmed by the influx of visitors. Wright argued that the bill would allow cities to allocate up to 60% of TLT revenues to public services while still ensuring a minimum of 40% for tourism. He framed this as a compromise that would support both tourism and essential community services.

City Manager Eric King from Bend echoed these sentiments, emphasizing the need for flexibility in using TLT revenues to address critical infrastructure demands. He highlighted that Bend experiences a significant increase in visitors during peak seasons, which strains local resources. King called for a balanced approach that would allow cities to maintain the infrastructure necessary for a sustainable tourism experience.

Conversely, Nick Pearson, a hotel owner, warned that the proposed changes could lead to economic damage for the tourism industry, which is still recovering from the impacts of the COVID-19 pandemic. He stressed that the bill could cut funding for essential marketing efforts, jeopardizing the recovery of the tourism sector and potentially leading to job losses.

As the committee deliberates on House Bill 3962A, the discussions reflect a broader tension between the need for local infrastructure funding and the imperative to sustain Oregon's vital tourism economy. The outcome of this legislation could have lasting implications for coastal communities and their ability to attract visitors while maintaining essential services.