San Juan Lodging Tax Committee doles out $315K in grants

Funhouse, teen entertainment and educational center on Orcas Island, awarded $9,000

Change could be in store in the way the annual proceeds from San Juan County’s so-called original 2 percent lodging tax are distributed.

The long-standing beneficiaries of those proceeds — like the islands’ performing arts centers, historical museums and the county Parks Department — can count on at least one more year of supplemental funding at nearly status-quo levels.

The county Fair Board, however, will have to settle for $25,000 less.

“Everybody was funded at last year’s level except the Fair Board,” county spokesman Stan Matthews said.

On June 10, the County Council allocated $315,000, which the 2 percent tax is expected to generate in 2008, between eight local non-profits and two government agencies. Those allocations are based in large part on the recommendations of the Lodging Tax Advisory Committee, which divvied up the projected total following a review of 25 funding requests.

In what may prove to be a precedent-setting distribution, the Funhouse, Orcas Island’s teen-oriented entertainment and educational center, was awarded $9,000. It’s the first time the Funhouse, which was seeking $20,000, had submitted a request. Its award represents a break in what had been a perennial formula of funding for a select group of beneficiaries.

Each group’s request was trimmed to accommodate an anticipated drop this year in 2 percent proceeds, as well as the requests of three first-time recipients, including the Funhouse.

The LTAC reviewed nearly $500,000 in requests for 21 different groups; 11, including the Whale Museum and Westcott Bay Institute, went home empty-handed.

“Next year, we hope to free up some extra cash and we’ll take a look at where we’re at then,” said long-time LTAC member Jim Nelson of Orcas Island. “I think we still have to sort out next year what constitutes ‘promotion’ and what constitutes ‘operations’ so everyone is on the same page.”

The Lopez Island Chamber of Commerce will have $6,000 for maintenance of a public restroom in Lopez Village next year. County Parks will have an extra $3,000 to help promote San Juans’ marine parks. (The council overruled a recommendation of the LTAC that would have given Outer Island Expeditions, a for-profit enterprise which had submitted the proposal, the $3,000 for promotion of marine parks).

Each beneficiary, beginning next year, will be required to track, calculate and report on its contributions toward the development of tourism with the money it received. Demands for increased reporting follow greater scrutiny on the use of local lodging tax revenues by the state and recent amendments to state law.

So far, county officials have been “conservative” in estimating the amount of revenue the lodging tax will generate this year. Midyear forecasts suggest that the 2 percent taxes — the so-called second 2 percent that is earmarked exclusively for tourism promotion — could dip by $70,000 by the end of the year. That’s an overall drop of roughly 10 percent when compared to the $700,000 the taxes produced in 2007.

By relying on conservative estimates, Nelson noted the odds that every allocation will be funded are better, as is a newly-established goal of building a cushion in the lodging tax account.

“The forecast is a little conservative, but we want to be sure there’s funding available for the projects that were selected,” Nelson said. “If it is conservative, then the money will rollover into the account and it’ll be available in the future.”

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