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Tigard reviews transient lodging tax: $2.2 million balance, council asks for strategy and community input
Summary
Finance director Eric Kang reported on Tigard’s transient lodging tax (2.5%), noting a $2.2 million fund balance and options including continued grant funding, a bond to finance tourism facilities or expanded event funding; council asked staff to pursue a community survey and a tourism strategy before changing uses or rates.
The Tigard City Council received a report on the city’s transient lodging tax (TLT) on March 4 and directed staff to return with a community-engagement plan and strategic options for using the accumulated balance.
Finance Director Eric Kang said the TLT is a 2.5% tax on hotel room rates collected by lodging operators; state statute requires that 30% of proceeds may be used for general operations and 70% be dedicated to tourism-related promotion or facilities. Kang reported the fund has accumulated approximately $2.2 million since collections began in fiscal 2019 and said a bond issuance using current revenue and fund balance could support roughly $6–7 million in debt, producing total capital in the neighborhood of $8.7–9.2 million depending on interest rates and program choices.
Kang told council that the city has used TLT proceeds for a grants program, community events and a drone show in place of fireworks, and that neighboring cities use similar taxes to fund arts centers, ballparks and event facilities. “The transient lodging tax is a 2 and a half percent tax that is imposed on room rates,” Kang said, summarizing statutory constraints and common uses.
Council members voiced differing priorities. Several urged continued or expanded funding for community-event grants and arts groups, and asked staff to consider ways the city could boost tourism with regional partners such as Explore Tualatin Valley. Others said the city lacks a clear tourism strategy to guide a large capital use and suggested that staff produce options and polling or focus groups to test community and stakeholder appetite before changing the tax rate or committing fund balances to a facility. Councilors also discussed whether expanding grant funding delivers sustained tourism return versus capital investments such as a community or conference facility.
Kang and staff committed to returning with more analysis, including possible strategies, community input, and partnership opportunities. The council did not adopt any rate change or capital decision at the meeting.
