City of Yachats officials say a small increase in lodging tax revenue from the summer shows that visits to the area remain strong. (City of Yachats graphic)
By GARRET JAROS / Lincoln Chronicle
YACHATS – A discrepancy in the usual direct correlation between tax revenue from hotels and restaurants has Yachats officials scratching their heads and looking for answers.
Although a late payment is balancing the spreadsheet somewhat, the city’s finance committee noted a sizable increase in income from hotel and vacation rental stays this summer paired with a notable drop in restaurant receipts.
The city’s largest revenue stream, which accounts for just over half its annual budget, comes from a 9 percent transient rental tax assessed to hotel rooms and vacation rentals. The city also collects a 5 percent tax on prepared food and beverage receipts, all of which goes toward paying for the wastewater treatment plant.
The city council reviewed the revenue totals at its November meeting for the first two quarters of the fiscal year, which is broken into four quarters that begin and end each April.
What they saw was an increase in transient rental taxes collected over last year of $21,933 from April to June and an increase of $42,365 from July to September.
City of Yachats officials are curious why second quarter revenue from a 5 percent food and beverage tax showed a drop from the same period last year. (City of Yachats graphic)For food and beverage taxes, there was an increase over last year of $10,635 for April through June followed by a severe drop of $47,642 for July through September.
City manager Bobbi Price told the council however that one restaurant had yet to report its tax receipts for the second quarter, which it has since reported to be $35,000, bringing the overall decrease from last year to $12,642.
“Transient rental, surprisingly is actually above last year,” Mayor Craig Berdie said at the meeting. “Very close to what we were two years ago, which was a great year. So people are still coming.”
The drop in food and beverage, more severe when viewed by the council two weeks ago, led them to question the reasons for the disparity between the revenue streams which usually track closely with the number of visitors. To that end, the city’s finance committee was already working to prepare a survey that will go out to hotels, vacation rentals and restaurants in the coming weeks.
The survey will attempt to decipher whether more people were staying in town but not dining out, whether restaurants ticket prices were higher or lower, whether there are fewer restaurants in town and whether room rates had increased or not.
Price“We also have two food and beverage locations that are very much struggling to pay their food and beverage tax so that is also reflected here as well,” Price told the council. “We are working with them.”
A comparison of revenue shows that the city received a total of $133,417 in food and beverage taxes in the first quarter of 2024 and $197,990 in the busy summer-season second quarter. This year it received $144,052 in the first quarter and $185,348 in the second quarter.
“The most important question is will there be enough funds to meet the city’s obligations for debt services,” Berdie asked Price who answered that projections show the city will meet its obligations.
Price told the Lincoln Chronicle this week that with the survey, the city is doing its due diligence to track trends in seeing how the ebb and flow of tourism affects lodging and restaurant receipts.
- Garret Jaros covers the communities of Yachats, Waldport, south Lincoln County and natural resources issues for Lincoln Chronicle and can be reached at [email protected]
I wonder how much the lower tax revenues in the summer months have to do with Leroy’s Blue Whale ceasing operations in April. We were regulars at Leroy’s because of the good food and service in addition to the menu pricing being somewhat reasonable. We are locals but haven’t eaten at any other Yachats restaurant in years because their pricing seems to be aimed towards the tourist trade (they’re very expensive). Whenever we went to Leroy’s we saw quite a few locals. I wonder how many locals like us only dine out in Newport and Florence.
We also dine out of town because of menu pricing. We frequented the whales tail more than anywhere else locally this summer. Happy to see Out of Gas Pizza under new ownership. In general we are dining out less, too expensive these days.
We too have stopped eating out in Yachats. Yes, eating out has gotten more expensive since Covid and it’s funny how you never see restaurants lower prices once they raise them? At least fuel prices fluctuate. But we also don’t like the city fee added to our meals expenses. That’s a financial hit to both tourists and locals. Just like we haven’t eaten at any restaurants in Newport where parking fees are now charged. We have lots of options to eat nearby where city fees or parking charges are not an added part of the experience.
Restaurants here have great food but the prices have become too high, especially for us locals. I think probably for some tourists too. Higher food prices, added city taxes and in some cases mandatory tipping and it quickly becomes cost prohibitive for average folks. If tourists spend more in lodging, they’ll likely spend less on dining out.