City reviews lodging‑tax process, proposes partial city allocation for signature events

Assistant City Manager AJ Johnson Newton presented an overview of the lodging excise tax and the Lodging Tax Advisory Committee (LTAC) process, and described a proposed funding approach for signature events.

Key points: the lodging‑tax collection rate will be 0.8% beginning April 2026 (previously 1%). State RCW provisions restrict lodging‑tax funds to tourism promotion and community events; eligible applicants include cities, towns, counties, convention/visitor bureaus, nonprofits and public‑facility districts. LTAC membership was described (two lodging‑business representatives, two representatives of eligible organizations, the mayor as chair and a staff liaison). Staff identified two vacancies for lodging‑business representatives and described outreach efforts to fill them.

AJ outlined a possible allocation framework under LTAC where the council could designate a portion of the lodging‑tax fund that the city itself could apply for (for example, 60% of available funds for city‑led signature events) while reserving the remainder (for example, 40%) to be available to outside entities. He emphasized that designation would not guarantee funding; all applicants would still have to meet eligibility criteria and LTAC would review applications in public meetings and make recommendations to council, which makes the final funding decisions.

Councilmembers asked about historical distribution of funds (staff said the city had been the primary recipient over the five years reviewed) and about centralizing event planning; staff distinguished resident‑focused community events from tourism‑drawn signature events. Staff will work with LTAC to develop formal allocation proposals and return with recommendations.