Title
Review of 2026 Lodging Tax Funding Tourism Service Proposals
Recommended Action
Move to Create a set of funding recommendations for City Council approval through the 2026 budget process.
Report
Issue:
Whether to recommend funding of all, part, or none of the 2026 Lodging Tax Funding applications.
Staff Contact:
Amelia Layton, Senior Program Specialist, Community Planning and Economic Development, 360.570.3808
Presenter(s):
N/A
Background and Analysis:
Annually, the Olympia Lodging Tax Advisory Committee (LTAC) makes recommendations on use of approximately on-half of the City’s Lodging Tax Fund. Per a long-standing agreement that pre-dates the Committee’s creation, the City uses the other half for capital and operating costs of the Washington Center for the Performing Arts, a City-owned facility.
An open call for tourism services funded by the Olympia Lodging Tax Fund was advertised beginning, June 27, 2025. The application deadline was September 19, 2025. LTAC members have reviewed and scored individual applications using the published set of review criteria.
Thirty-nine (39) applications were received for a total of $1,773,828 in requested funding. The City’s Finance team anticipates new Lodging Tax revenue for 2026 to be $625,000 and the estimated fund balance to start 2026 (also referred to as reserves) is estimated at $1,170,000. Previously encumbered LTAC contracts for 2026 total $234,300.
Climate Analysis:
Tourism inherently has a climate impact due to the requirement of travel.
Equity Analysis:
The inclusion of questions around accessibility considerations is the first step to encourage applicants and funded organizations to build their event/activity/facility to be inclusive to everyone’s participation. The addition of the non-discrimination language in the application indicates the seriousness of which the City of Olympia takes discrimination and that failure to comply will impact funding. Along with the inclusion of the applicant’s mission statement helps reviewers to ensure values of the organizations are in alignment with the values of Olympia.
Neighborhood/Community Interests (if known):
Many major community events and facilities receive funding from this program. For some events and facilities, the Lodging Tax funding is critical for their continued operations.
Options:
1. Approve the funding created funding recommendation.
2. Do not approve the funding recommendation.
Financial Impact:
Lodging tax fund is a restricted resource to be used for tourism related activities. Collected in two components: first 2% - credit against sales tax City allocates to Washington Center for the Performing Arts. Second 2% - not credit against sales tax awarded by competitive application reviewed and recommended by Lodging Tax Advisory Committee.
Thirty-nine (39) applications were received for a total of $1,773,828 in requested funding. The City’s Finance team anticipates new Lodging Tax revenue for 2026 to be $625,000 and the estimated fund balance to start 2026 (also referred to as reserves) is estimated at $1,170,000.
Attachments:
Chart 2026 Lodging Tax Applications
Chart Olympia Lodging Tax Award History