A bill to increase Oregon’s lodging tax is scrambling party allegiances in Salem.
House Bill 4134, which would raise the statewide lodging tax from 1.5% to 2.75%, squeaked through the Oregon House on Tuesday by the three-fifths majority of 36-22 before advancing to the Senate.
The Senate Committee on Finance and Revenue on Friday voted 3-0, with two absences, to advance the bill, which would fund state conservation efforts and compensate ranchers who lose livestock to wolf attacks, a longstanding issue for many rural Oregon lawmakers and their constituents.
The bill is forecast to generate approximately $38 million per year. Opponents argue issuing a tax increase now will tie a millstone around the state’s recovering hotel industry.
Before the House vote on Tuesday, the floor debate revealed divides among Republicans caught between their caucus and their constituencies. And the bill tested Democrats’ appetite for tax hikes.
Three Democrats — Reps. Shannon Isadore of Portland, John Lively of Springfield and Daniel Nguyễn of Dunthorpe — voted against the increase.
But three Republicans — Reps. Greg Smith of Heppner, Mark Owens of Crane, and Bobby Levy of Echo — voted for it, granting the three-fifths majority required of bills that raise revenue.
After a group of Republicans testified in favor of HB 4134, Rep. E. Werner Reschke, R-Malin, held a printed copy of the bill aloft and said: “This is a tax. … How does raising taxes on Oregonians make it more affordable to live in Oregon?”
Speaking in opposition to the bill, Reschke said he wanted to remind other House Republicans that their party’s mission is to cut taxes. He then likened the tourism industry to vulnerable sheep or cattle.
“The knives are out to gut their industry like a wolf,” Reschke said.
Bill sponsor Owens, the Crane Republican, said the lodging tax increase would not be enough to deter tourists from coming to Oregon or jeopardize tourism industry jobs.
“If I felt this passthrough fee was going to affect those jobs, I wouldn’t be here today. I don’t think it is,” he said. “But this is a tax vote. I don’t take any tax votes lightly.”
Owens and other backers of the bill said looking for funding for natural-resources management in the general fund, based on their experience in Salem, was a fool’s errand, forcing them to seek the money through a tax increase.
“I’m here to stand up for my ranchers, my farmers and support this today because this is the position I’ve been forced into,” Owens said.
Nguyễn, the Dunthorpe Democrat, said he acknowledged the need to support wildlife and conservation work. But Oregon’s signature restaurant and tourism businesses have not recovered to pre-pandemic levels, he said.
“I’m really reluctant to do anything that jeopardizes that full recovery,” Nguyễn said before casting a no vote.
The bill went before the Senate Committee on Finance and Revenue on Friday, where it garnered the support of Sen. Dick Anderson, R-Lincoln City, and the two Democratic committee members.
“I personally find it hard to vote for tax increases and fee increases,” Anderson said.
But he underscored that Oregon draws tourists by its natural beauty – be it the parks or countryside – a virtue the tax increase would help safeguard, he said.
“I’ll be a yes today,” Anderson said.
If approved, HB 4134 would take effect next year.
