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Bill would let municipal lodging taxes pay for nonprofit tourism facility capital projects
Summary
Senate Bill 5251 would expand permitted uses of lodging-tax revenue to allow capital expenditures for tourism-related facilities owned by nonprofits; tourism groups warned capital spending could deplete limited local marketing funds while proponents said projects would generate room nights.
Senate Bill 5251 would allow municipalities to use lodging-tax revenues for capital expenditures for tourism-related facilities owned by nonprofit organizations, a change sponsors say would help expand facilities that attract visitors while opponents warned it could reduce funds available for marketing.
Cole McCarthy, staff to the committee, summarized current statute: lodging tax revenue may be used for tourism marketing, marketing and operation costs for special events, supporting operating and capital expenditures of tourism facilities owned or operated by a municipality or a public facilities district, and supporting operating expenditures of tourism facilities owned or operated by nonprofits. The bill would make capital expenditures by nonprofits eligible as well.
Sponsor Senator Leonard Christian (4th District) said he supported the change because it would let cities invest in nonprofit projects that drive visitors, citing local examples including the HUB Sports Center and Spokane Valley Theatre. He described the HUB as hosting many youth-tournament visitors and said expanded facilities and parking “are ready to just put into another phase.” Phil Champlin, executive director of Hub Sports Center, told the committee the center hosted 189,000 youth and families last year, generated an estimated 4,500 room nights and an estimated $7 million in economic impact, and is seeking outdoor-field expansion to support additional events.
Opponents including Becky Bogard of the Washington State Destination Marketing Organizations argued the change “goes way beyond” the Spokane projects and warned that allowing nonprofit capital projects would let capital spending “eat up a fund” that local DMOs use for marketing. Bogard said lodging-tax committees and city councils currently make allocation decisions and that the bill lacked negotiated guardrails; she suggested concerns about undefined “tourism related” projects.
Supporters said applications would still go through local lodging-tax advisory boards and city councils, and a Liberty Lake mayor said the city has no immediate capital project and that a local tourism capital fund can grow over time. The committee took testimony but did not vote during the hearing.
