The Dalles City Council voted unanimously Monday to permanently dedicate 55.4 percent of the city’s transient lodging tax revenue to tourism promotion and reserve the remainder for city services and infrastructure. Based on the $1.45 million the tax generated in fiscal year 2024-25, the March 9 decision allocates about $803,000 annually for visitor marketing and $647,000 for discretionary municipal needs.
The council approved the ordinance but removed language that would have immediately authorized the city manager to transfer administration of the tax program to the Oregon Department of Revenue. City staff will study whether state oversight would benefit The Dalles and will return with recommendations before any decision is made on shifting the program from local control.
The 8 percent lodging tax rate remains unchanged. The Dalles has charged that rate on hotels and short-term rentals since 2003.
Oregon law requires cities and counties to spend at least 55.4 percent of transient lodging tax collections on tourism promotion. The Dalles ordinance adopts that minimum at the local level. It also removes the option of shifting more funds away from visitor marketing.
The requirement stems from House Bill 4148, which passed during the 2026 legislative session after testimony from city officials across the state. Sarah Chaney, who supported the bill, said city leaders needed more funding for infrastructure because existing sources were not enough.
The legislation followed testimony from The Dalles, Bend, Astoria, and other communities about wastewater plants, streets, and parks handling increased visitor use. Newport’s overnight population rises from 11,000 residents to 40,000 during peak season. The Dalles cited similar pressures during events and the summer tourism season.
House Bill 4148 gave cities permanent flexibility to use the non-tourism portion of lodging tax revenue for services without changing local tax rates. The Dalles has kept its lodging tax rate at 8 percent since 2003.
Under the permanent 55.4 percent tourism allocation, The Dalles cannot reduce marketing funding below that level even if infrastructure demands increase. The city currently contracts with The Dalles Area Chamber of Commerce for $465,000 per year for tourism marketing and visitor promotion. That leaves about $338,000 of the tourism allocation unspent or available for additional promotion activities.
The council’s decision to postpone the state administration question separates the revenue allocation issue from the collection issue. If administration were shifted to the Oregon Department of Revenue, the state would take over collection and enforcement while the local revenue split and spending decisions would remain the same.
Supporters of state administration said it could improve compliance and standardize reporting for lodging operators with properties in multiple Oregon cities. Critics said it could reduce local control over collection timing, audit priorities, and relationships with taxpayers.
The study period will allow city staff to assess whether state administration would increase collections, reduce administrative costs, or create complications under The Dalles’ tax structure. No timeline was announced for when staff will return with recommendations.
The weekend before the council vote, the inaugural Dalles Hoot music festival drew more than 400 attendees each night to performances at the Granada Theatre alone. Rian Beach, vice president of the Dalles Overground and co-director of the festival, reported those attendance figures during public comment at the March 9 meeting.
City Manager Matthew Klebes said he attended the festival and observed large crowds at music and art venues throughout downtown. Hotels reported strong bookings during the event weekend. Organizers plan to present an economic impact report to the city in the coming weeks.
Lisa Farquharson, CEO of The Dalles Area Chamber of Commerce, said events including the Hoot and the Northwest Cherry Festival scheduled for April 24-26 generate business revenue and jobs. The city’s annual tourism promotion allocation is $803,000.
The Chamber has adjusted event planning to account for downtown construction related to the First Street Project. Farquharson said the goal was to find a balance that preserves economic activity during construction. Klebes said the Chamber adapted by using distributed event activations to reduce disruptions.
The council’s decision comes as Oregon considers whether to increase the statewide transient lodging tax rate. House Bill 4134 proposed raising the state portion from 1.5 percent to 2.75 percent to fund wildlife programs.
The Oregon State Chamber of Commerce opposed the increase in testimony signed by chamber leaders, including Lisa Farquharson of The Dalles. The letter said tourism supports small business, provides jobs, and builds the tax base. It also said the proposed increase would place tourism and wildlife program funding in competition.
The chamber network also urged lawmakers to keep lodging tax revenue tied to tourism uses. A statewide rate increase would be added to local rates such as The Dalles’ 8 percent.
The council also approved two nuisance abatement resolutions placing liens on properties where owners did not comply with cleanup notices. One assessment seeks to recover $2,200 in cleanup costs from a property at 2315 East Second Street, where the city hired contractors to remove junk and dog feces.
The liens allow the city to recover those costs through property tax bills. Property owners may appeal the assessments within a specified period after the council adopts the resolution.
The council also issued a proclamation supporting the 2026 Veterans Stand Down scheduled for May 16 at Lewis and Clark Park. The event will connect veterans with housing, medical, employment, and education resources.
Source: Council updates lodging tax law, securing majority control of Tourism Revenue | CCC News