Creating a framework for equity and new events funding weighed for local tourism events

Olympia's Lodging Tax Advisory Committee (LTAC) is seeking the assistance of the Social Justice and Equity Commission to incorporate an equity framework in its policy update.

At the commission meeting on Monday, Mike Reid, the city's economic development director and LTAC liaison, presented an overview of the LTAC program and asked the commissioners to assist the advisory committee in creating an equity-focused activity for the project.

Reid explained that the lodging tax is a restricted resource exclusively for tourism-related activities. The funds are collected when someone stays in a hotel or Airbnb in Olympia.

"The intention is, if someone stays in a hotel or an Airbnb, we collect a tax. Those taxes then circulate into creating the events and activities people want to stay in a hotel. So, it creates a sort of self-refilling program there," Reid said, adding that it is defined in RCW 67.28.1815 – 1816.

He said the city collects two portions. The first 2% collected goes to the Washington Center for Performing Arts. The second 2% is subject to the LTAC for recommendations to the council.

According to Reid, the lodging tax can be used for four primary purposes:

• Tourism marketing
• Marketing and operation of special events and festivals that attract tourists from at least 50 miles away
• Operations and capital for tourism facilities owned and operated by municipalities or public facilities districts
• Operations of tourism-related facilities owned and operated by nonprofit organizations
• Examples of events that qualify for the tax include Lake Fair, Arbor Day, and marathons.

Reid said the tax could also provide funding for arts facilities such as the Children's Museum, the Washington Center, and theaters like the Harlequin Theater and the Olympia Film Society's Theater.

The LTAC, Reid added, had about $985,990 in fund requests from 25 nonprofit organizations and had granted $780,490 worth of awards.

In January, the city council removed the Capital Lake Fair from the funding list after the organization was accused of discriminating against a teenage girl with a disability by excluding her from the 2023 Royalty Court scholarship program application process.

The city council canceled the $25,000 award to the organization.

Equity help

"I need help applying an equity lens and developing an activity framework associated with this project," Reid told the commissioners.

He enumerated four areas in the project that needs some review that might need improvements:

• Council policy statements for the use of Lodging Tax funds
• Council priorities for Lodging Tax use
• LTAC review considerations
• Lodging Tax application and process, including application questions, application distribution, and application completion training.

Reid noted that in 2007, the city council created a statement for using Lodging Tax funds as the primary source for the city funding for activities, operations, and expenditures designed to increase tourism.

He said the city does not make any multi-year commitments for tourism services, but service providers are not prohibited from making annual requests of the same nature.

Commissioner Wesley Nguyen pointed out that the list of organizations to be funded this year has mostly been recipients for several years.

"How about [organizations] may get grants once or twice and then go through another cycle before they apply again. I think what I'm seeing from your list is that many folks are repeating this grant. So, therefore, you're not getting new candidates," Nguyen said.

Commission Chair Genevieve Chan expressed concern about the biases towards established legacy events in the application process due to familiarity and community support, compared to upstart organizations that may not be perceived the same way.

"We don't want to jeopardize them, especially coming out of COVID where a lot of these events are still in recovery mode. We want to make sure we can keep those things – not only legacy events but also legacy institutions,” Reid told Chan.

“They are important to us."

Reid explained that one of the council's priorities for Lodging Tax use is that an organization "demonstrated history of success in Olympia, or are proposed by a group with a demonstrated history of high potential of success with similar activities."

Chan asked for the possibility of splitting funds into two tiers to support both established legacy events and new emerging events, which Reid would want to consider.

Commissioner Larry Watkinson wants the application process to be very clear about non-discrimination.

Watkinson stressed the importance of ensuring that the city's application process and event support are respectful of all individuals regardless of race, gender, disability, and others.

The commission would fully discuss the LTAC funding process when the three new commissioners are on board.