Council moves forward with tourism tax reduction

The Oak Harbor City Council approved the Lodging Tax Advisory Committee’s recommendation to decrease the city’s contribution to the Island County joint tourism promotion agreement by more than 50 percent.

The committee suggested the change because members felt that Oak Harbor contributes a disproportionate amount of money — about $40,000 annually — into the program for the amount of publicity it gets. In contrast, Langley contributes approximately $20,000 and Coupeville, $13,000.

The council’s decision Tuesday to move forward with the proposal marks the first step toward amending its agreement with program partners, Island County, Langley and Coupeville. The change will not go into effect until the proposal is approved by the other participants.

According to Paul Schmidt, city administrator, the program’s initial intent was to promote all of Whidbey Island. But the money may be better spent if it’s kept locally, he said, adding that the funds could be used to provide greater financial support for local promotions, such as new banners to welcome out-of-town guests, or to improve existing events like the Whidbey Island Marathon.

The issue surfaced now because any change to the agreement must be announced six months in advance, and Oak Harbor officials would like to have the change in effect by the start of 2010.

If Island County, Langley and Coupeville refuse Oak Harbor’s request to pay a flat fee in place of the 1 percent lodging tax contribution, the city will give its one-year, end-of-contract notice. Then when the contract is cancelled, the city would stop paying into the joint tourism program and pursue its own tourism promotion program.

Not everyone is comfortable with the idea of ending the agreement if Oak Harbor doesn’t get its way.

Jill Johnson, executive director of the Greater Oak Harbor Chamber of Commerce and three-year member of the Lodging Tax Advisory Committee, is wary of leaving the joint tourism program altogether.

“I’m in favor of the reduction, but not the termination,” she told the council

“The reality is, we need to focus our resources toward promoting local tourism, to get out the right message and welcome out-of-town visitors,” Johnson said.

Councilman Danny Paggao also voiced some reservations over the proposal, but ultimately voted in its favor.

“It seems like the agreement is quite harsh because if (Island County, Langley and Coupeville) do not agree, Oak Harbor will pull out,” he said.

Schmidt countered that the Island County Joint Tourism Board could propose a counter offer in place of the $20,000 flat fee.

“We’re just trying to right-size our contribution,” he said.

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