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MICHAEL DUNNE: I'm Michael Dunne. Tourism makes money, but it also costs money. Indeed, as we head into the height of Oregon's tourism season, with thousands of people flocking to the coast, the mountains and the cities, it's important to take stock of the benefits, but also the costs. Yes, our state is blessed with a robust tourism industry that brings in hundreds of millions of dollars, but we're also sometimes cursed with the damage that so many people can bring with them. Today on the show, you'll hear from a reporter who's done exhaustive research on how tourism costs many cities in infrastructure damage and increased services and an effort to change tax law so that cities can recoup money for all the damage. Then in the second part of the show, we'll check in with the Eugene airport and its struggles with federal budget cuts. James Neff, the managing editor and reporter for the Oregon Journalism Project, thanks so much for coming on and talking with us.
JAMES NEFF: Thank you.
MICHAEL DUNNE: I read your recent story that you posted for the Willamette Week titled - The Oregon City's clash with travel industry over whether tourism taxes should pay for wear and tear on your favorite destinations. Why don't you give us sort of the 30,000 foot view of that article and what the issues are?
JAMES NEFF: So first of all, just for your listeners, you know, the Oregon Journalism Project has 44 different news partners and outlets in the state, and you know, Willamette Week is one of them, and it seems like that's where most people see a lot of our work. Okay, but the piece was about the clash between cities and other public entities and the tourism industry regarding how do you carve up the $45 million a year that comes from the statewide lodging tax. And so, this lodging tax for every overnight stay includes Airbnb campgrounds by law, and there are some exceptions, but it's split about 70% required to be spent on promotion and only 30% on whatever else you want, like say EMS, because you have more demands on that service when you have a giant festival in your town. So, some places like Seaside, which you know, the mayor there doesn't want to promote any more tourism, particularly in the summer and spring break times. And so rather than spend that money in the season on promotion, he's only spending money in the off season, and, you know, year round, trying to get people to come there. So he has banked about a million dollars a year that he hasn't spent, and he has $11 million they would like the law to be changed so that it's not 7030 and in fact, since that story published, a house bill, if you're interested in the number you know, check it out. 3962 has passed the House floor, and that switches it from 7030 to 4060, and so, as you can imagine now, there's more opportunity to compensate cities for the tourism related costs, wastewater, police overtime, mostly for seaside they want to spend it on road improvements. Because, you know, that has been the most pressing need, and so across the state, there are other municipalities that want to get their hands on more of the tourism tax, but the hotel and restaurant industry has opposed this, and there are other tourism related groups that do oppose it as well, such as the, you know, sort of the tourism, big regional tourism, Chamber of Commerce’s or marketing groups called destination management organizations.
MICHAEL DUNNE: Yeah. That’s the big clash, okay? And I imagine those organizations you just described, their opposition is what they obviously, I guess I'm hearing they want to keep the money sort of allocated the way that it is, so they can continue to do what they do, right?
JAMES NEFF: Right. Their argument is, look, in 2003 we agreed to tax ourselves as an industry, and we have this tourism tax, and so in exchange for that, the board that overlooks Travel Oregon, which is the semi-independent state agency that divvies up the money and sends it out, they have five of the nine commissioners come from the hotel industry, and then three of the nine additional come from tourism related businesses, and there's one sort of public at large. And so, their argument is, you know, this is the law. We don't want to change it. It's worked so well. Tourism is now bringing in $14 billion a year. It's an important part of our economy, and it's, you know, boosted more jobs in the industry by 10s of 1000s. And we know what we're doing. We're the expert marketers, and let us do our thing. So that's pretty much their point of view.
MICHAEL DUNNE: When you talked to the mayor of Seaside, talk about some of the problems that he illustrated to you, it sounds like, you know, roads are a big issue. I guess we always feel like tourism is such a great thing, but obviously a mayor of a coastal city like that is saying, “Well, let me tell you about the big problems that it causes.” Talk about some of the things that he talked to you about?
JAMES NEFF: The mayor who you know has testified or submitted written testimony that you know in supporting this change. You know, he points to, look, I have too much money, and it's, I'd like to spend it, but, you know, it's my hands are tied, so it's not working. You should change the law to give cities the flexibility to, you know, upgrade the roads to spend more, you know, on EMS during spring break or, you know, the summer months. You know, help me when we have unexpected police overtime, we handle lots of water rescues. So, yes, we love tourism. We love people who come to our city. We don't want to do anything to hurt tourism. And you know, we market to Spokane and Tacoma, and, you know, Salt Lake City in the off season, to get people, you know, to come to our you know, our region. But, you know, untie my hands. So that's sort of what his argument is. And in addition, places like Bend, you know some of the you know, social science, some of the polling, some of the research, some of the surveying by the Oregon State tourism lab. It's like a 50/50 split in Bend. If you ask resident tourism due to the cost outweighing the benefits, and it's, you know, there's a majority there, a majority that says it's good. It's really split. And so that's not good for the community. You know, you don't want to go someplace. And you know, have an experience where you're not welcome. If you're on a vacation. So, I think that there's a growing sentiment, you know, in some pockets of Oregon that wants change. And I think that's sort of illustrated by the bill that is past the house, and is now being taken up by the Senate.
MICHAEL DUNNE: It was interesting. As I was reading your piece, I saw a word I had never really contemplated before this idea of, you know, over tourism and listening to what you've uncovered this is, this is probably a somewhat of an underreported problem that we're facing in the state. Is that, is that kind of a fair assessment?
JAMES NEFF: I think people in many parts of the state are, you know, unaware, unaware of it. But if you're in places where there's concern about, you know, the environment, some of the natural wonders, then you know the economic impact, the. Is a growing sentiment. And in states like Montana and Florida, where it's, you know, become very, very strong, they put in some laws that, you know, many think aren't super wise. They'd like a more nuanced approach, but are just sort of capping, capping visitors, you know, putting hard caps on, on the influx, and if you it's pretty much gotten hold in Europe like Barcelona, they are. They don't want all these cruise ships. We don't want all these folks coming here. The kind of jobs are being created. Or, you know, you're in it. You're selling trinkets. You know, our culture as a city, our culture as a, you know, community, it's, it's being lost because we're being flooded. And so this really strong anti-tourist sentiment in Barcelona, in New York, other parts of Europe. And so, you know, we're starting to see that in other parts of the US, and it's something that the industry and municipalities and officials are going to have to grapple with.
MICHAEL DUNNE: Do you have any sense in terms of where the governor is on this?
JAMES NEFF: The governor's office wouldn't, in response to direct questions about the bill. Did not want to show their cards at this moment.
MICHAEL DUNNE: Okay, hey, James. While I got you here, I want to take advantage of talking to you about another story you've been you've been covering, and this is this situation with the retiring, former head of travel Oregon, Todd Davidson, you know, give you wrote this story about they're not being very transparent about his pay and so on so forth. Just give us a quick synopsis of that issue.
JAMES NEFF: So, Todd Davidson, who has been criticized for being one of the highest paid state officials for a very tiny agency with only 70 employees. While I was preparing the story, he announced his retirement, which he had said was long planned. Then at a most recent board meeting, they gave an offer, a letter of offer, which was to keep him on for another year, and while the board, I mean, is finding his successor. So, you know, he's involved in helping pick the, you know, the recruitment firm. And so he's, he's assisting the transition to a new CEO by staying on for one year, maybe longer. It could be even less, but I asked for the letter offer that they voted on last on Tuesday, June 10, and wasn't provided, which was very unusual. They withheld it, saying, Oh, we have to get signatures on it. Well, you know, I didn't ask for that record. I asked for the record that they used to vote on. So I did write about that, because I couldn't get it from them. I couldn't get it from the commissioners. I reached out to three of them, and then the story ran, and then later that morning, I did get a copy of the offer letter.
MICHAEL DUNNE: Really appreciate all your reporting and tracking all this stuff down. James Neff is the managing editor and reporter at The Oregon Journalism Project. Really appreciate you taking some time to talk about your recent stories.
JAMES NEFF: Thank you, and really appreciate a chance to connect with your community and your listeners.
MICHAEL DUNNE: EUG depends on federal money, but right now that spigot is closed for political reasons, we check in with the airport director. Cathryn Stevens, the director of the Eugene airport. Thanks so much for coming in and talking to us.
CATHRYN STEPHENS: Happy to be here.
MICHAEL DUNNE: Well, let's, let's start with this. How has traffic and usage been going at the airport?
CATHRYN STEPHENS: We've been busy. Our traffic counts have actually been slightly down. It's really flat for the year. However, I would say summer is starting off with a bang, and we are definitely seeing increased passenger numbers, and we know that our number of seats are also up in the market. So, I think we'll have a very busy summer.
MICHAEL DUNNE: Okay, okay, you have some pretty expansive plans for the airport. Why don't you remind folks what, what are your plans for the airport?
CATHRYN STEPHENS: Sure. Well, just this summer alone, we had four major projects in the queue ready to go. We're moving forward on a couple of those. One is an asphalt rehabilitation around a concourse area. Another is a drainage project that also includes a very small amount of wetlands infill, but mainly to reduce some of the ponding at the end of one of our runways. And then we also. We're planning a concourse expansion at the same time, starting later in fall, but we've had to kind of pause that. And then we also had a net zero energy project, which was basically looking at how we can have more resilient energy sources at the airport. So, you know, in case of some kind of disaster or prolonged electrical delay, something like that.
MICHAEL DUNNE: You teed up my next question, which is, there have been some reports that there's been sort of a halting in funding. Talk about that and how it's going to impact some of these projects.
CATHRYN STEPHENS: Earlier this year, we received notification from the Department of Transportation about some updated grant assurance language. So, when you accept federal grants as an agency, you have to assure certain things, and usually those are tied back to federal law, and then, in this case, some executive orders as well. And so, some of the language that came through was not going to be workable for us here in Eugene, or actually for the state of Oregon, and as a result, we found ourselves not able to apply for or sign the grant agreement for the grants that we were planning on obtaining for this summer's construction projects.
MICHAEL DUNNE: Fill us in this what, what some of that language was that didn't work?
CATHRYN STEPHENS: Well, there were a few different things in that language. Some of it had to do with the DEI language that, in itself, didn't seem to be completely insurmountable. But then there was also language that specifically talked about cooperation and not impeding ICE operations, and that does go directly against Oregon State law.
MICHAEL DUNNE: What's sort of the funding mix for the airport?
CATHRYN STEPHENS: Well, as far as our capital improvement program, the federal funding is the largest part, we are completely reliant on our federal funding, and that comes from the airport and airways trust fund. So that is funded through things like aviation fuel tax and ticket tax and a variety of things that make up that trust fund that is then funneled back out to airports across the country for our capital improvement program, sure. So, for us, just this summer alone, it was a fifth $14 million influx into our capital program. If you take a look at our next five-year capital improvement program, plus this summer, it's a total of about 57 million and that was just what was programmed. There's always opportunity to add to that over the, you know, six-year period. So, it's significant.
MICHAEL DUNNE: I know you talk to other colleagues around the nation, and here in Oregon, other airports and whatnot. I imagine there are other airports, like perhaps PDX or whatnot, that might be experiencing this same sort of a challenge. Is that correct?
CATHRYN STEPHENS: This is really being evaluated all across the country, and it's impacting mostly sanctuary jurisdictions. So, we know there are 14 sanctuary states, including the District of Columbia, but there are also about 633 roughly sanctuary jurisdictions across 40 states. So, it is pretty impactful. And of course, there have been lawsuits. We're starting to see some injunctive relief from those, and then it's going to look different in every single one of those sanctuary jurisdictions, depending on the lawsuits, lawsuits that maybe a jurisdiction is involved in or not involved in, and then what the specific laws in either the state or that jurisdiction are
MICHAEL DUNNE: I imagine you’re kind of in this wait and see mode to see what happens with the injunctive relief, with the lawsuits and whatnot. But are there, are there any other options you might have to try and source funding so you can keep going?
CATHRYN STEPHENS: So, we definitely are in a kind of a wait and see mode as far as this federal grant language issue as part of the city of Eugene, and of course, the city attorney's office, they are evaluating that and seeing what our options are. So, in the meantime, my job is to keep the airport running, indeed. And so what we've done, we've looked at what critical projects are, and we are, in quotations, self-funding those this summer. So that includes the asphalt rehabilitation around the concourse pier and then the drainage project as well. So those go directly to maintaining the infrastructure that we have, and then also reducing some of our wildlife hazards and. By getting rid of the ponding so we felt very strongly that we needed to go ahead with those projects. We've written those contracts in hopes that maybe eventually this will get sorted and we'll be able to apply for those grants eventually. But right now, it's we're on our own, and then we've had to pull down, unfortunately, the concourse, a expansion that would have been starting in the fall, and that's really unfortunate, because I know our whole community was so excited for that project, and I will say it's not canceled, it's just it's on hold for now, and hopefully this will be remedied at some point we'll be able to get that going again. Otherwise, we'll be looking at other forms of funding. That project already was going to have some passenger facility charge backed bond funding to it, and so we may look at, okay, now, what does it look like if we completely fund that project through bond funding.
MICHAEL DUNNE: Before I let you go; I did want to give you the opportunity. I know that this is a challenge, obviously, but are there some other things coming down the pike, coming in the future that you're looking at, even if it's just a hope, but if there's just some projects you want to talk about that'd be great.
CATHRYN STEPHENS: Well, you know, really, this summer snapshot is just one small piece of an ongoing capital improvement program that we've been working on for many, many years. And so some of these pieces are what we call enabling projects working towards our much larger concourse expansion into the future. A lot of these things, we're still going to be in the planning phase so that we'll have a shovel ready project ready to go when we do work all of this out or identify other funding sources. I guess for me, what keeps me up at night a little bit, is we've got a window of time here where we're okay. We're self-funding a couple of key projects. But in two years, I've got a taxiway rehabilitation that has to be done, and in 2030 I have the main runway that needs to be rehabilitated. And those things don't just, it's not like you can put off doing a home improvement project in your house. Those are things that actually have to be done, so I have full faith that we will get a solution by that point.
MICHAEL DUNNE: Cathryn Stevens, the director of the Eugene Airport, challenging but exciting times ahead. Thanks so much for coming in and talking with us.
CATHRYN STEPHENS: Thank you.
MICHAEL DUNNE: That's the show for today. All episodes of Oregon on the record are available as a podcast at KLCC.org. Tomorrow on the show, you'll hear about a proposed change to Oregon's kicker that could help fund our state's urgent need to fight wildfires. I'm Michael Dunne, and this has been Oregon on the record from KLCC. Thanks for listening.
