≡-Oregon Cities Clash with Travel Industry Over Whether Tourism Taxes Should Be Used to Fund Infrastructure Repair and Address Wear and Tear on Popular Destinations – Viral of Today

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Oregon Cities Clash with Travel Industry Over Whether Tourism Taxes Should Be Used to Fund Infrastructure Repair and Address Wear and Tear on Popular Destinations

Thursday, June 19, 2025

Seaside: The Strain of Over-Tourism

Seaside, a coastal gem in Oregon, draws more than two million tourists every summer, making it a major contributor to the local economy. However, the influx of visitors, while financially beneficial, also places an overwhelming burden on the town’s infrastructure. Roads wear down, emergency medical services are stretched thin, and the town is left with thousands of tons of waste to manage. This has led to a growing challenge: how can the town balance the financial benefits of tourism with the costs it incurs? In this scenario, the mayor of Seaside, who has limited control over how the lodging tax revenue is spent, has sought solutions that would allow the funds to be used for more immediate needs, like road repairs and public safety, instead of just tourism promotion.

The Challenge of Restricted Funding

Despite the massive revenue generated by tourism, much of the lodging tax collected in Seaside is restricted to marketing and tourism-related projects. This means that the town cannot allocate this money for vital public services like fixing potholes or hiring additional police officers to handle the surge in visitors. Seaside officials, including the mayor, have found themselves in a difficult position, where they are forced to save the tax revenue rather than use it to address pressing infrastructure issues. As of now, Seaside has accumulated around $11 million in unspent lodging tax funds, but they’re unable to utilize most of it for anything other than marketing tourism. The mayor has expressed frustration, noting that the town has reached a “saturation point” with tourism promotion and sees no need to keep pouring money into marketing.

Statewide Repercussions

This dilemma isn’t unique to Seaside. Communities along the Oregon Coast, as well as inland cities like Sutherlin and Bend, are facing similar struggles. Tourism, while economically essential, has become a double-edged sword. Many residents and local officials feel the negative impacts of the heavy tourism load, especially as cities and towns lack sufficient funds to cover the cost of increased demand for public services. In these places, there is an ongoing debate about whether the benefits of tourism outweigh the strain it places on local infrastructure and public services.

House Bill 3962: A Potential Solution

To address these challenges, Oregon lawmakers have introduced House Bill 3962, a proposed piece of legislation designed to give cities more flexibility in how they allocate lodging tax revenues. Currently, the formula splits lodging tax revenue with 70% earmarked for tourism marketing and only 30% for city services. Under the new proposal, this would shift to a 40/60 split, allowing a larger portion of the tax to be used for services such as police, fire departments, road repairs, and other essential services that are impacted by the high volume of tourists.

This bill, which has now passed committee and is expected to reach the House floor soon, is seen as a response to the growing concerns about over-tourism and the burden it places on local communities. However, it faces opposition from the tourism industry, which argues that lodging taxes should remain dedicated to promoting tourism and economic development, especially during the shoulder seasons when travel tends to dip.

Industry Opposition and Pushback

Groups such as the Oregon Restaurant and Lodging Association have voiced strong opposition to the bill, arguing that the taxes were specifically intended for marketing and promoting Oregon as a tourist destination. They fear that redirecting funds away from marketing would undermine efforts to draw tourists to the state, especially outside the peak summer months. Additionally, regional destination marketing organizations (DMOs), which rely on state funding to promote local tourism, are also pushing back against the bill. They argue that shifting the focus away from tourism marketing could have long-term consequences for Oregon’s tourism economy.

National Implications of Overtourism

The proposed changes in Oregon are part of a broader national trend aimed at managing over-tourism. According to experts, 33 state legislatures have introduced more than 500 bills this year alone aimed at redirecting tourism taxes or placing greater regulations on the industry. This growing movement reflects the dissatisfaction of local populations, who are increasingly voicing their concerns about the negative impacts of unchecked tourism.

In Oregon, there is a noticeable shift in how people view tourism’s role in local economies. Some lawmakers, including Representative Cyrus Javadi from Tillamook, have argued that tourism interests treat lodging tax revenue as though it belongs solely to the industry, instead of recognizing it as a shared resource that should benefit both the tourism sector and the communities that host them.

Support for the Bill

Support for the bill has come from several local officials who have directly experienced the strains of over-tourism. Mayors from cities like Yachats, Newport, and Lincoln City, along with county officials from Lincoln County, have testified in favor of HB 3962. For instance, Lincoln County sheriff Adam Shanks highlighted the increasing strain on law enforcement and emergency services, noting that between 2019 and 2024, tourists accounted for a substantial portion of arrests, crime victims, and traffic citations in the area. Their support reflects the growing concern that without changes, tourism will continue to deplete public resources.

Local Case Studies

In smaller communities like Sutherlin, the strain of tourism is felt during major events like the town’s annual Blackberry Festival, which draws large crowds and generates significant revenue. However, the festival also results in environmental damage, vandalism, and the need for extra police presence. Sutherlin city manager Jerry Gillham expressed frustration over the inability to use lodging tax funds to cover these costs, a limitation he believes would be addressed if HB 3962 passes.

Tourism Agency Oversight

Alongside discussions about reallocating tax revenue, there are also calls for greater transparency and oversight of the state’s tourism agency. Critics have argued that the agency’s leadership is too closely aligned with the hotel industry, raising concerns about potential conflicts of interest and the lack of accountability in how tourism funds are managed. Some lawmakers have called for reforms to ensure that the tourism board is more balanced and subject to greater legislative scrutiny.

Implications for Travelers

If HB 3962 passes, tourists may see noticeable changes in their experiences. Better-maintained roads, increased safety, and cleaner public spaces could make popular destinations like Seaside more enjoyable for visitors. However, the downside could be less aggressive marketing campaigns for lesser-known spots, meaning travelers might find fewer opportunities to explore off-the-beaten-path destinations.

Additionally, as local governments gain more control over lodging taxes, increased fees for services like parking and support facilities could become more common as municipalities seek to offset the costs of tourism. This shift signals a broader trend toward creating a more sustainable tourism model, where visitors contribute to the costs their presence imposes on local communities.

The debate over how to manage tourism and its economic benefits in Oregon highlights the tensions between sustaining local economies and protecting the resources that support them. With growing concerns about overtourism, the proposed changes in the lodging tax system could represent a critical step toward ensuring that tourism benefits local communities in a sustainable and equitable manner. As the bill continues to move through the legislative process, its outcome could serve as a blueprint for other states grappling with similar issues. For travelers, it signals that future experiences may come with a more balanced approach to the costs and benefits of tourism.

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