Jeb Bladine: Oregon likely to change tourism funding split

Chaos and angst are among this week’s catchwords in Salem as the Oregon Legislature approaches mandatory adjournment by June 29 amid rumors that legislators may leave town by early next week.

One controversy involves a proposal to move many room tax dollars from tourism promotion to general municipal services — more on that below.

A major transportation tax-and-spend measure, one of the session’s top priorities, appeared this week to be languishing. Reports from Wednesday detailed high frustration among both supporters and detractors of the bill, with some calling it the sign of a “failed Legislature.”

Another high-interest bill proposes taking hundreds of millions of dollars from Google and Meta (formerly Facebook) to use as compensation to community news operations for alleged long-time “theft of services.” High tech systems – and now new platforms driven by Artificial Intelligence – continue to gather, summarize and monetize the news reporting by newspapers and other news media businesses.

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SB686 would be a first-in-the-country solution of direct compensation from those mega-companies to remaining newspapers and other news media outlets. The bill, said to be dead early this week, received a stay of execution in mid-week when it was passed out of a Senate committee to a pending floor vote.

Meanwhile, those many news outlets have been reporting for months on the 2025 financial challenges for cities and counties, which created pressure to change the use of transient room tax revenue.

Current law requires 70 percent of those funds to be spent on tourism promotion or the development and debt costs of tourism-related facilities. That leaves 30 percent for other services by cities or counties that adopted those tax programs.

First, this year, HB3556 proposed allowing cities and counties to use all room tax funds by adding “public safety” and “community infrastructure” as permitted uses for the 70 percent now dedicated to tourism.

There was plenty of support from cities and counties, and great anguish from the tourism/hospitality industries, as legislators received 225 pieces of testimony from throughout the state. But just as HB3556 seemed destined to be left at the altar, a rewrite of the bill became new “gut-and-stuff” content for HB3962.

At press time, that bill had passed the House and was headed to a Senate floor vote. Instead of potentially eliminating all tourism funding from room taxes, HB3962 would change the current guarantee of 70 percent to “at least 40 percent” for tourism, leaving up to 60 percent for city/county services.

As reference, the city of McMinnville’s 2025-26 budget proposal shows an expectation of about $2.15 million in transient room taxes. After city expenses, 70 percent of net revenue, more than $1.3 million, goes to the private Visit McMinnville group for promoting tourism.

If HB3962 is adopted, McMinnville room tax revenues going to tourism promotion next year likely would shrink by more than 40 percent, with more than $600,000 added to funding for general city services.

As you might guess, in these last few days of the legislative session, people interested in transportation, news media and tourism — among many others — are biting their nails.

Jeb Bladine can be reached at jbladine@newsregister.com or 503-687-1223.