Tourism tax could be doing more for Mac

Given the dramatic increase in transient lodging tax funds being collected in McMinnville, it’s time the city reevaluated the almost $1.3 million being split between tourism promotion and the city’s general fund.

In its first full fiscal year, 2014-15, the tax generated just over $600,000. Four years later, it’s on pace to double that. The projection for fiscal 2019-20 is $1,281,166. 

There are three major reasons for the outsized increase: 1) The opening of the upscale Atticus Hotel last spring; 2) A hike in the rate from 8% to 10% in the fall of 2017, accompanied by expansion of the program to also encompass RV parks and campgrounds; 3) Accelerating growth in tourism, based largely on the rising interest in Oregon Wine Country.

Guided by state law, 70% of tourism tax money must be spent on tourism promotion or tourism-related facilities. McMinnville has been turning over that portion to the nonprofit Visit McMinnville to cover its staff, consulting and marketing expenses, and depositing the rest in its general fund.

We’ve long advocated for investing a portion of tourism tax revenue, along with state lottery money dedicated to county economic development, to facility enhancements. The states’ eligibility criteria include conference, convention and visitor centers, along with any property displaying “a substantial purpose of supporting tourism or accommodating tourist activities.”

We have no quarrel with Visit McMinnville, which has an ongoing marketing campaign reaching potential visitors across the nation. We’ve heard from locals who appreciate the agency’s billboard-style “color block” ads, which earlier this year earned the Overall Oregon Tourism Marketing Program Award.

Others consider the campaign unappealing. However, the ads certainly stand out, and are designed to target youthful to middle-aged adults from urban areas. 

But does the city really need a $1 million a year marketing and promotion budget? Is that more of a priority than, say, steps to improve the airport experience for well-heeled visitors?

TLT dollars can also be held over, accumulating a sum over time for a larger facilities-related project.

The issue was discussed briefly during recent budget deliberations. We hope the council gives it a more critical, longer look in the near future. 

When the city council hiked the rate two years ago, it was unanimous in agreeing the increase to the city’s share should be dedicated to helping address homelessness.

To our knowledge, that objective has not happened. However, because the money flows directly into the general fund, it’s difficult to track with any degree of precision.

The city is scheduled to receive $400,000 in basically found money this coming fiscal year, from its unrestricted cut. In our assessment, dedicating some to addressing homelessness and boosting affordable housing is an idea worth strong consideration.