Baker County’s transient lodging tax advisory committee voted 5-1 on Thursday morning, April 17, to recommend county commissioners give Baker City $570,500 in lodging taxes to help the city start a tourism marketing campaign.

Committee member Matthew Koppenhaver cast the lone dissenting vote.

The three county commissioners — Shane Alderson, Christina Witham and Michelle Kaseberg — will make a final decision on the city’s request.

The matter was prompted by the Baker City Council’s decision, as recommended by City Manager Barry Murphy, to withdraw, as of July 1, from the 2006 city-county agreement regarding the lodging tax.

Since 2006 the county has collected the tax, including within the Baker City limits, and overseen distribution of the revenue.

Starting July 1, the city will have its own lodging tax, and the city council will decide how the spend the revenue. The city, like the county, is required by state law to spend 70% of the revenue for tourism marketing and 25% for economic development (the city can keep up to 5% to administer the program). Murphy told the lodging tax committee that the city will create its own ordinance, and advisory committee, for the lodging tax.

People pay the tax when they stay at motels, bed and breakfasts, vacation rental homes and other lodging establishments. The tax is 7% of the rental rate.

Guests at lodging businesses within the Baker City limits pay an estimated 80% of the taxes, although a precise amount is difficult to determine because companies that handle many vacation rental homes don’t report tax figures by area.

Starting July 1, the county will collect lodging taxes in unincorporated parts of the county and in Halfway, Sumpter and Unity.

The city council’s decision to pull out of the 2006 agreement, and start collecting lodging taxes within the city limits, has provoked a debate between city and county officials over what to do with taxes the county has collected, but not spent, by the end of the current fiscal year on June 30.

Lodging tax collections have set records each of the previous three fiscal years — $954,000 for the most recent fiscal year — resulting in a carryover projected at $1.6 million at the end of the fiscal year, but potentially as much as $2 million.

In a March 31 letter to the county, Murphy and Baker City Mayor Randy Daugherty proposed that the city receive 80% of lodging taxes remaining in the county budget as of July 1, 2026. The letter projects that the city would get $1,252,000, and the county would keep the remaining $313,000.

But Witham contends the county must comply with its ordinance, which doesn’t include any provision to give the city a “lump sum” of tax revenue.

Nor does the 2006 agreement include such a clause, Witham said.

She told Murphy and Daugherty that the city can ask the county lodging tax committee.

Murphy presented that request to the committee during its meeting Thursday.

The city asked for $625,000.

That included $80,000 for Baker City Downtown. Witham, who represents county commissioners but is not a voting member of the lodging tax committee, said the $80,000 request is not appropriate because commissioners’ decision to award that amount was a one-year deal that expires Oct. 31.

Witham recommended the city reduce its request for Baker City Downtown to $25,000, the amount the county has in its budget.

Murphy called that idea “reasonable,” and he reduced the city’s request by $55,000, to $570,500.

Murphy told committee members he thinks the city’s request is “very fair.”

He said that based on county records, of the $7.79 million that lodging guests paid in that tax from the 2006 agreement between the city and county through June 2024, $6.14 million — 79% — was paid by people staying within the Baker City limits.

If the county gives the city the amount it requests, as well as giving Baker City Downtown $200,000 for the Court Plaza project, which Murphy recommended, the city would be receiving about 50% of the unspent lodging taxes.

That’s “much less” than the approximately 79% of lodging taxes collected within the Baker City limits, Murphy said.

That would also leave the county with about $800,000 in revenue, he said.

“The data shows that lodging facilities within Baker City contributed a major amount of the revenue reflected in the remaining fund balance, and Baker City believes it is reasonable to provide this money to assist with the transition,” Murphy wrote in his letter to the lodging tax committee.

Once the city starts its own lodging tax program, the county will have considerably less revenue since most of the taxes are paid within the city limits.

Tyler Brown, chairman of the lodging tax committee, said his main goal is to promote a “seamless transition” as the city and county, as of July 1, have separate lodging tax programs.

Brown said he hopes the city and county will “work together” in trying to attract tourists, noting that there is no true “separation” between the city and county in terms of tourism attractions.

“That’s what’s important to me, that there’s collaboration and cooperation,” Brown said.

The county uses lodging taxes to pay for three contracts — with Baker County Chamber of Commerce to operate the visitors center on Campbell Street near the freeway ($94,970), with Jessica Hobson as the county’s tourism marketing director ($70,000), and $56,760 per year to Bryan Tweit, the county’s economic development director.

Court Plaza

The lodging tax committee voted unanimously to recommend county commissioners approve Baker City Downtown’s request for $200,000 for the Court Plaza, but with a condition.

The committee’s recommendation is contingent on confirming with the Oregon Restaurant and Lodging Association (ORLA) that that group thinks that spending lodging taxes on the project complies with the state law defining what constitute “tourism-related facilities.”

The state law, mirrored in the 2006 county ordinance, requires that 70% of lodging tax revenue be spent on tourism marketing, which can include certain facilities.

Ariel Reker, Baker City Downtown executive director, and Witham both said they had emailed Jason Brandt, ORLA CEO and president, asking about whether Court Plaza complies with the state law governing the use of lodging taxes.

Reker said Brandt told her the project complies, but Witham said Brandt cited to her as examples of qualified projects three parks in the Salem area that are much larger than Court Plaza.

Witham questioned whether Court Plaza is qualified to receive lodging taxes.

Reker told the committee that the project has been “40 years in the making.”

The goal is to make the block of Court Avenue, between Main and Resort streets, into a pedestrian plaza that can host a variety of events as well as connect the downtown historic district with Central Park and the Leo Adler Memorial Parkway, just east of Resort Street.

Reker told the committee that the $200,000 would increase the project budget to just over $1 million, which is enough for Baker City Downtown to solicit construction bids and potentially break ground in the spring of 2026.

Baker City’s tourism promotion plan

Murphy’s letter to the lodging tax committee included a breakdown of how he proposes to spend lodging tax money.

• Baker City Transient Lodging Tax Board ($2,500): this budget line will develop training and materials for members of the City’s new TLT Board.
• Tourism Association Costs ($2,000): the City will need to pay for tourism associations in the region and state for the upcoming year.
• Development of Electronic Marketing Tools ($20,000): this item will focus on website development, social media site creation, and other areas that are needed to stand up Baker City’s program.
• Brand Development ($15,000): Baker City currently does not have a marketing brand that captures the entire City. This item will be used to create a brand, design logos, develop slogans, print and electronic distribution of brand products, etc.
• Digital Content and Asset Creation ($12,000): additional funding for digital content is critical and matches a current budget line item in Baker County’s tourism marketing budget.
• Fulfillment Products ($25,000): the City will need to create a line of products for distribution that include maps, brochures, rack cards, visitor guides, etc.
• Guide Distribution ($4,000): once the fulfillment products are ready, the City will need to distribute them in various locations for maximum benefit.

• Baker City Collaboration Marketing ($25,000): this line item is intended to market the tourist areas that are not included in Baker City Downtown. There are hotels, restaurants, areas that cater to children, and other activities that are not in the downtown area and attract tourists. This funding will help market those areas to build a more complete picture of what Baker City has to offer.
• Co-Operative Marketing ($25,000): this item focuses on teaming up with other tourism partners in the County, Travel Eastern Oregon, and Travel Oregon. It will help augment marketing efforts that focus on events occurring in Baker County or larger geographic areas.
• Baker City Downtown Marketing and Visitor Services ($25,000): this item is to fund the agreement previously approved by the County for BCD visitor services. If this item is funded, Baker City will start a new agreement with BCD that commences on 1 July 2025, so the County will not have to pay anything else to BCD after June 30, 2025.
• Special Events Marketing ($35,000): this item will fund marketing for Baker City’s many special events such as Miner’s Jubilee, the Motorcycle Rally, Car Show, Bicycle event, etc. These events drive Baker City’s activity especially during the summer months, and continuing to market these events is critical.
Event Grants ($35,000): this item will continue funding to help get new events off the ground that bring tourists into Baker City.
• Shrine Game ($10,000): this item continues specific funding for the Shrine Game that the County supported in the past. This is a major event for Baker City and needs to continue receiving funds.
• 1A Basketball Tournament ($10,000): this is another item to continue specific funding that the County has always supported. The 1A Basketball Tournament brings in visitors across the State and generates significant economic activity every year.
• Travel Publication Advertising ($35,000): travel publications are effective methods of advertising that can lead to greater reach for Baker City’s marketing efforts.
• Trade Shows ($2,000): travel to trade shows is another effective tool that matches a current County budget line.
• Wayfinding Physical Products ($120,000): creation of new city signage and district signage (Campbell St Business District, 10th St Business District, Downtown & Central Commercial Districts, etc.). This is an area specifically called out in the 2018 Tourism Strategic Plan that necessitates a lot of effort and funding. Baker City’s intent is to develop a series of signs similar to examples in the Strategic Plan from Pendleton, Tacoma, etc.
• Wayfinding Electronic Products ($30,000): this will update and maintain electronic wayfinding to ensure that all local attractions and businesses are on popular mobile map apps.
• Travel & Training ($8,000): this item will cover any required training and travel necessary to stand up the City’s tourism program.

• Agriculture/Culinary Tourism ($15,000): this is an area specifically called out in the Tourism Strategic Plan that has a lot of potential based on Baker City’s rural location and the preferences of many travelers.
• Arts and Culture Tourism ($15,000): this is another area specifically discussed in the Tourism Strategic Plan that lines up well with Baker City’s strengths.
• Tourism-Related Facilities ($100,000): this item will cover any tourism-related facility needs that Baker City has during the first year.